The BOE has to either stop buying UK Gilts (bonds) on Friday as they previously said or else inject billions more.
Mind you interest rates are going to increase.
“Asset purchases can also change yields in the market place but the BoE has an inflation price stability objective and that is going to stand in the way of having permanently lower interest rates”: IMF’s Adrian
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Weirdly those "tax cuts" weren't tax cuts if you take into account
fiscal drag, i.e. that not moving the bands brings more people into higher tax bands and costs them more is actually saved by the rate reduction:
"Compared with uprating, such freezes reduce household incomes and strengthen the public finances – all the more so in the high-inflation environment we currently find ourselves in.
These freezes – which represent a stealthy and arbitrary way to raise tax revenue – often have a bigger impact on household incomes than more eye-catching discretionary measures.
...
Freezes to personal tax parameters alone will reduce households’ income by £1,250 on average by 2025–26. Adding in freezes to benefits and gradual policy roll-outs brings that figure to £1,450, or 3.3% of income, and means a £41 billion boost to the exchequer. That is double the £20 billion gain in household income (and loss to the exchequer) from the high-profile personal tax giveaways – the reduction in National Insurance contributions and 1p cut to the basic rate of income tax.
In other words, on average for every £1 households gain from high-profile cuts to rates of income tax and National Insurance, they lose £2 from the freezes and policy roll-outs. Not only does this hold in total, but
in every income decile the average impact of gradual roll-outs and freezes outweighs the impact of the explicit discretionary policy changes.
4.
The combined impact of headline tax changes, policy roll-outs and frozen taxes and benefits by 2025–26 is broadly regressive, with the poorest seeing income falls of 2.8% of income and the richest falls of only 1.1%. Headline cuts to income tax and National Insurance will benefit higher-income households who are more likely to get more of their income from employment, while the poorest tenth of households will gain only £13 per year from these measures. Because some tax thresholds and – especially – benefits values are indefinitely frozen, the impact of freezes only grows over time. As a result, by 2030–31 the total changes to the tax and benefit system are more clearly regressive, with the highest-income tenth seeing a 1.3% fall in income and the lowest-income tenth a 4.7% fall.
5.
Freezes to tax thresholds and benefit values combined with higher-than-expected inflation change the shape of the tax and benefit system. The four-year freeze to the personal allowance and higher-rate threshold (scheduled to run to March 2026) is expected to increase the share of adults paying income tax to 66% (35 million) and the share paying the higher rate to 14% (7.7 million), compared with 63% (34 million) and 11% (6.1 million) today. The point at which the personal allowance begins to be tapered away (£100,000) and the additional-rate threshold (£150,000) have both been frozen since their introduction in 2010. By 2025–26, 3% of adults (1.6 million) will have some of their personal allowance withdrawn, and 1.4% (760,000) will pay additional-rate tax – in both cases around triple the equivalent number in 2010 when the thresholds were created."
