Although the Telegraph has got this entirely wrong.
George Osborne saddles taxpayer with £133bn bill as accounting trick backfires
Treasury is on the hook to cover losses on government debt held by the Bank of England
Yep. Treasury booked the profits – the vast river of interest payments on QE – so Treasury gets to book the losses.
Under a deal cut by Mr Osborne, the Government foots the bill for any losses the Bank incurs from the difference between returns on its bond holdings and the interest it pays out.
Recent interest rate rises and chaos in gilt markets “will mean cash starts flowing from the Treasury to the [Bank]”, the OBR said.
The policy was introduced by Mr Osborne in November 2012 when the Bank was making a profit because interest rates were lower than bond returns.
Mr Osborne, who was then Chancellor, declared that income from these bonds could be used to reduce government debt.
At the time, the The Treasury was given £120bn as a result.
Quite. But this being the modern media:
This bill came about because commercial banks are paid interest on reserves held at Threadneedle Street at the current interest rate, which climbed from 0.1pc last December to 3pc this month.
No, different thing. Part of QE and all that, but still slightly different thing. Whatever the rate being paid the banks on reserves, BoE will still be booking losses on QE.