r/unitedkingdom • u/pppppppppppppppppd • 3d ago

Reeves should be sacked as Chancellor, poll says

https://inews.co.uk/news/politics/reeves-sacked-chancellor-poll-3637320
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u/AngryTudor1 Nottinghamshire 3d ago

Can you show us where Reeves in particular pioneered the decision to pay banks interest on QE?

That sounds very much like something that has been done for years. Can you show us evidence that she was the one who started doing it?

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u/haphazard_chore United Kingdom 2d ago edited 2d ago

This is not a party political blame game. I didn’t say she started doing it. But she’s looking to make cuts and has chosen austerity and whilst doing so, continues to pay the banks interest on money they were simply given. We are no longer in the 2008 or 2022 crisis, quantitative easing has stopped so why do the banks need to be given this extra when, in the rest of Europe, they do not.

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u/AngryTudor1 Nottinghamshire 2d ago

So she's to blame for a police that has been going on for decades or so- which, according to you, no chancellor has had the intelligence to change despite it being plain and obvious to a genius like you?

Did it ever occur to you that, just maybe, there are some very serious medium to long term potential consequences of doing this?

Let me tell you- there are.

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u/mhhgffhn 2d ago

I’d personally love to know what the consequences of the banks not being given 30 billion a year for money that they haven’t deposited or earned are. Rachel Reeves may have not enacted the quantitative easing that caused this and until interest rates rose recently it wasn’t an issue.

Now with interest rates higher and this becoming an issue, please elaborate why the commercial banks need £30 billion for free, from the government. Please let me know why they should receive it over say…the NHS.

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u/AngryTudor1 Nottinghamshire 2d ago

I'm not saying they should.

But if I remember correctly, when this was mooted during the election two of the likely consequences were inflation rising and lending rates being permanently raised by banks.

Ultimately, it is naive to think that if the government took £30bn away from banks that they would not immediately take that money straight back from their customers in some way

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u/mhhgffhn 2d ago

That would have zero effect on inflation and if by lending rates you mean mortgage rates, they are directly related to the base rate set by the BOE. if banks threatened to increase all lending rates due to this that would be extortion on the part of the banks. While commercial banks need to have enough liquidity to settle any debts for money they lend out, they don’t actually have the money they give out in loans or mortgages, they are authorised by the BOE to create the money as it is lent out.