Question to the HM Treasury:

To ask His Majesty's Government what provisions they are making for the projected losses arising from the Bank of England’s sale of government bonds acquired as part of its quantitative easing programme.

HM Treasury agreed to indemnify the Asset Purchase Facility (the vehicle used for quantitative easing) against losses when it was set up in 2009. To date, the APF has transferred over £120 billion of excess cash to HM Treasury from net interest payments on purchased assets. As quantitative easing is unwound, and gilts are sold back into the market, this cash flow is expected to reverse. The first payment to the APF was made in October 2022.

The overall gains or losses arising from the APF are highly uncertain and will be determined by the future path for Bank Rate and gilt prices as well as the independent Monetary Policy Committee’s (MPC) approach to sales.

Information on the provisions for future APF payments will be available through the normal Parliamentary Process as part of the Main Estimate expected to be published in May 2023.