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BoE losses add pressure on the public finances

The Treasury has started to make payments to the Bank of England’s Asset Purchase Facility (APF) to cover the losses it has racked up because of the Bank of England’s gilt purchases. While this won’t force the Chancellor to tighten fiscal policy further, and the losses may even end up being lower than the OBR expects, it does highlight how higher interest rates are weakening the public finances.

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