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Jaya Sood @jayasood.bsky.social · 17/09/2026

10/ Bond markets reacted well with yields pricing in the lower path this implies. A mammoth coordination exercise between Bank and Treasury 🤝 great to see.

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Jaya Sood @jayasood.bsky.social · 17/09/2026

9/ 👉 The Bank also set out a full roadmap to 2034 for winding down its £488bn QE stock; more detail than usual, which should cut some of the uncertainty that's been driving long gilt yield volatility

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Jaya Sood @jayasood.bsky.social · 17/09/2026

8/ 👉 Full terms due by April 2027 but not guaranteed the DMO buys everything the Bank wants to sell. Smart coordination, but still won't save as much as a full switch to passive QT would

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Jaya Sood @jayasood.bsky.social · 17/09/2026

6/ 👉 Paused all gilt sales until April 2027 👉 Will permanently hold £120bn of long-dated bonds, the ones QT was hitting hardest, avoiding locking in losses at today's depressed prices

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Jaya Sood @jayasood.bsky.social · 17/09/2026

5/ Today's changes were more complex than that, but genuinely interesting. Here's what changed 👇

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Jaya Sood @jayasood.bsky.social · 17/09/2026

4/ The Fed and ECB don't do this as they let QE bonds mature naturally (passive QT) rather than actively selling (active QT). We've argued the BoE should do the same, and/or coordinate much better with the DMO.

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Jaya Sood @jayasood.bsky.social · 17/09/2026

3/ It also meant the Bank was selling gilts into the market at the same time as the DMO's own annual issuance. More supply, no extra demand = yields rise = government borrowing gets pricier. Worst for the least-popular bonds.

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Jaya Sood @jayasood.bsky.social · 17/09/2026

2/ NEF has long argued the fiscal costs of QE/QT matter. Since 2022 the Bank has sold QE gilts back to the market at a loss [bought high, sold low] with the losses indemnified by the Treasury, reducing fiscal space.

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Jaya Sood @jayasood.bsky.social · 17/09/2026

1/ A lot went down with the Bank of England today. Brilliant to see increased coordination between the Bank and the Treasury's Debt Management Office (DMO) to reduce the fiscal cost of Quantitative Tightening -> the Bank selling off bonds it bought during QE. www.bloomberg.com/news/article...

bloomberg.com

BOE Scraps Long-End Gilt Sales in Plan to Unwind QE by 2034

The Bank of England gave Britain’s bond market some much needed relief with an overhaul of its plan for selling off excess gilts that piled up on its balance sheet in the previous decade.

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New Economics Foundation @neweconomics.bsky.social · 17/08/2026

Outdated fiscal accounting rules are holding back urgently needed investment. Our Senior Economist @jayasood.bsky.social explains ✍️👇 neweconomics.org/2026/08/brit...

neweconomics.org

Britain's state investment institutions can't compete with Europe's

Outdated fiscal accounting is holding us back

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Jaya Sood @jayasood.bsky.social · 28/04/2026

Instead: replace pass/fail fiscal rules w/ standards judged by an expert panel, & a formal route for government to disagree with the OBR when well-justified. A framework for a thriving economy. Not one that mistakes contraction for prudence. [8/8] tinyurl.com/aebh8azp

tinyurl.com

Written evidence - UKFA0014

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Jaya Sood @jayasood.bsky.social · 28/04/2026

The OBR's forecast errors consistently run in the same direction - underestimating econ damage of spending cuts, overestimating growth under austerity. Recommending more consolidation to fix a framework that mismeasures its cost is not a solution. [7/8]

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Jaya Sood @jayasood.bsky.social · 28/04/2026

So: don't worry about OBR scoring. But also: build substantially larger buffers. The only way to build those buffers *within this framework* is to comply with OBR scoring. You cannot grow your way to bigger headroom if growth doesn't count until it has already happened. [6/8]

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Jaya Sood @jayasood.bsky.social · 28/04/2026

Moreover, the report waves away concerns about OBR scoring: just implement good policies regardless, and trust that the positive effects will show up later... [5/8]

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Jaya Sood @jayasood.bsky.social · 28/04/2026

NEF: "targeting larger amounts of headroom may be an illusion as damaged growth [from foregone spending] reduces expected tax revenues and increases borrowing needs." You don't build fiscal resilience by shrinking the economy that funds it [4/8] tinyurl.com/aebh8azp

tinyurl.com

Written evidence - UKFA0014

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Jaya Sood @jayasood.bsky.social · 28/04/2026

Here's what the focus should be: knee-jerk policy decisions to meet fiscal rules → economy damaged more than OBR forecast → headroom erodes anyway → more cuts required or rules changed → credibility damaged. [3/8]

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Jaya Sood @jayasood.bsky.social · 28/04/2026

The report conclusion: Reeves needs a *bigger* fiscal buffer. I was at the launch of the IFS' new report 'From Fiscal Rules to Fiscal Traffic Lights' last month: the entire panel agreed we should STOP obsessing over headroom... [2/8] ifs.org.uk/publications...

ifs.org.uk

From fiscal rules to fiscal traffic lights: rethinking the UK fiscal framework | Institute for Fiscal Studies

The UK’s approach to fiscal policy needs a rethink. The current framework, based around a set of pass–fail fiscal rules, isn’t working well.

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Jaya Sood @jayasood.bsky.social · 28/04/2026

Lords Econ Affairs Cttee final report on the fiscal framework conclusion is, unfortunately, about as predictable as debt rising after a round of austerity. Hyper-fixating on the size of the fiscal buffer is completely the wrong conversation. [1/8] tinyurl.com/mscadtbm

tinyurl.com

Rachel Reeves’s fiscal rules buffer should be ‘significantly larger’, say peers

Peers say chancellor and recent predecessors have allowed themselves too little room for manoeuvre

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Jaya Sood @jayasood.bsky.social · 28/04/2026

The solution: replace pass/fail fiscal rules w/ fiscal standards judged by an expert panel, & a formal route for government to disagree with OBR assumptions when well-justified. A framework for a thriving economy. Not one that mistakes contraction for prudence. [8/8] tinyurl.com/aebh8azp

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Jaya Sood @jayasood.bsky.social · 28/04/2026

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Jaya Sood @jayasood.bsky.social · 28/04/2026

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Jaya Sood @jayasood.bsky.social · 28/04/2026

Moreover, the report waves away concerns about OBR scoring: just implement good policies regardless, and trust that the positive effects will show up later... [5/8]

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Jaya Sood @jayasood.bsky.social · 28/04/2026

As NEF points out: "targeting larger amounts of headroom may be an illusion as damaged growth [from foregone spending multipliers] reduces expected tax revenues and increases borrowing needs." You don't build fiscal resilience by shrinking the economy that funds it… [4/8] tinyurl.com/aebh8azp

tinyurl.com

Written evidence - UKFA0014

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Jaya Sood @jayasood.bsky.social · 28/04/2026

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Jaya Sood @jayasood.bsky.social · 28/04/2026

tinyurl.com

From fiscal rules to fiscal traffic lights: rethinking the UK fiscal framework | Institute for Fiscal Studies

The UK’s approach to fiscal policy needs a rethink. The current framework, based around a set of pass–fail fiscal rules, isn’t working well.

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George Bangham @georgebangham.bsky.social · 07/04/2026

“Lunch with George Clooney at Lake Como; a walk-on role in Star Wars; a Lamborghini blessed and signed by the late Pope Francis.” Some excellent stories about Omaze in this New Statesman piece by my colleague @hollies.bsky.social… with some reflections on what it says about our political economy.

newstatesman.com

Is Omaze too good to be true?

The property giveaway is just another facet of Britain's never ending housing crisis

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George Bangham @georgebangham.bsky.social · 27/04/2026

Interesting suggestion that HM Treasury might consider regulating private rents. Putting aside the obviously unwise one-year rent freeze suggested here, there’s several modern rent control systems to learn from like in Ireland, Scotland, Spain and France. www.theguardian.com/politics/202...

theguardian.com

Rachel Reeves considering rent freeze to limit Iran war fallout

Exclusive: Sources say chancellor is examining exceptional measures to protect household budgets

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Positive Money UK @positivemoneyuk.bsky.social · 03/02/2026

“It’s hard to square senior Bank of England officials stating that climate has fallen down the list of priorities, whilst in the same breath describing it as an existential threat with risks now materializing on firms’ balance sheets.” Our Sr. Policy Manager in Bloomberg 👇 www.bloomberg.com/ne...

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Chaitanya Kumar @chaitanyakumar.bsky.social · 21/01/2026

Very pleased to read the PR for the Warm Homes Plan this morning. The best insurance against energy price volatility is a solar + battery combo for a household. So it's excellent to see an ambition of tripling rooftops with PV. Combine it with a battery and its magic! www.gov.uk/government/n...

gov.uk

Families to save in biggest home upgrade plan in British history

Government launches Warm Homes Plan to upgrade the nation's homes, help families cut their energy bills, and tackle fuel poverty.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

Holding interest rates is not the way to go. That will hamper economic activity and hammer millions of people with mortgages and loans. We need to see rates come down. Monetary Policy Committee will likely again be divided on the Feb decision.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

We have a BoE interest rates decision coming up on 5th Feb: unemployment is increasing and is at 5.1%, wage growth is slowing. Inflation is being driven by one-off air fare oddities + the UK's unique exposure to supply shocks + and administered prices that won't drop out the numbers til April.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

And (2), supply-shock-driven food and energy prices still feed through to core inflation, indirectly, as they serve as inputs to businesses across sectors.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

And yesterday's data showed wage growth slowing in the three months to November to 4.5%, down from 4.6% in the three months to October.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

The problem with that is (1) services inflation recently is not all about labour costs - and has been largely driven by jumps in regulated/administered prices from April 2025 (so y-o-y inflation starting before that incorporates the jump) that are in government's control.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

What does this mean for interest rates? BoE looks to: (1) labour-intensive services inflation for a sense of how much increases are driven by labour costs, thus warranting rate hikes; and (2) core inflation excl. food + energy to try and see past supply-shocks that hikes won't address.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

Price rise in air fares this time last year were the third lowest since 2001, hence the jump up this year. And whereas last year, most long haul flights' scheduled landing was New Years Eve, this time around most landed a day earlier - so more expensive flights captured in the Dec data this year.

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Jaya Sood @jayasood.bsky.social · 21/01/2026

Inflation up again, from 3.2% in Nov to 3.4% in Dec, just as it seemed we might be on a downward trajectory. Mostly driven by alcohol & tobacco + air fares, so arguably not the bare essentials. But food prices are still climbing.

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New Economics Foundation @neweconomics.bsky.social · 17/12/2025

We're entering a new era where inflation will be caused by global shocks - and raising interest rates will not do much to address it, says @jayasood.bsky.social on LBC News.

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Jaya Sood @jayasood.bsky.social · 17/12/2025

We must invest in addressing the climate crisis for economic stability. BoE has it's role to play in that, just as govt has it's role to play in tackling inflation theguardian.com/business/202... 4/4

theguardian.com

Bank of England urged to do more to tackle climate crisis

Environmental groups mark 10 years since Mark Carney’s ‘short-term horizons’ speech with plea to act ‘while there’s still time’

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Jaya Sood @jayasood.bsky.social · 17/12/2025

No doubt government interventions on the CoL this budget (energy bills, rail fare freezes) will help the downward trajectory into 2026 (OBR forecasts 2.5%), hope to see more of this (mon-fisc coordination in inflation-fighting) in future 2/4

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Jaya Sood @jayasood.bsky.social · 17/12/2025

UK Nov CPI inflation at 3.2% down from 3.8% over the summer and 3.6% in Oct, amidst economic contraction, a rise in unemployment and slow wage growth. No excuse for BoE not to cut rates tomorrow 1/4

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Jaya Sood @jayasood.bsky.social · 26/11/2025

5/5 It's a move towards better coordination. Lower inflation means BoE can cut rates, lowering the cost of green investment and mortgages. Lower interest rates means lower government borrowing costs - opening space for the investment we desperately need: investinbritain.org.uk/resource/clo...

investinbritain.org.uk

Closing the gap - The case for a public investment target - Invest in Britain

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Jaya Sood @jayasood.bsky.social · 26/11/2025

4/5 Government has also recognised the need for stronger regulation on specific dysfunctional markets - like dentistry - to bring down costs. Another nod to the relative efficacy of government policy over general interest rate policy for targeting specific sector cost issues.

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Jaya Sood @jayasood.bsky.social · 26/11/2025

3/5 ...although cutting energy bills must not come at the cost of better insulating and retrofitting out homes - more on this (ECO etc) in another thread.

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Jaya Sood @jayasood.bsky.social · 26/11/2025

2/5 High interest rates can't bring down energy price spikes caused by geopolitical conflict and the UK's overreliance on gas. Yet energy costs feed through to almost all other prices. Fiscal policy is better suited to tackling this - government now rightly recognises this.

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Jaya Sood @jayasood.bsky.social · 26/11/2025

1/5 Government recognising this budget that the Bank of England can't solve inflation alone is a step towards stronger monetary-fiscal coordination that NEF has been calling for some time: t.co/yc4IEFFamD

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New Economics Foundation @neweconomics.bsky.social · 24/11/2025

After years of austerity and a prolonged cost-of-living crisis, households are really struggling. Investment is essential. The Chancellor's budget must provide the support needed. NEF's senior economist @jayasood.bsky.social on @lbc.co.uk.

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