Nigel Farage renews pledge to tax banks by scrapping Bank of England interest payments

"Quizzed on whether the proposal, first outlined in Reform UK's 2024 manifesto, remained party policy, Farage replied bluntly: "We are going to do it." "Some of the banks won't like it," he added. "Well, I don't like the banks very much because they debanked me, didn't they? This will be tough for banks to accept, but the drain on public finances is just too great.""

"Farage rejected claims that the move amounted to a new tax on banks, insisting instead that lenders were benefiting unfairly from central bank policy. "They are just not going to get free money anymore," he said. Under current arrangements, commercial banks earn interest on the reserves they hold at the Bank of England, a mechanism designed to transmit monetary policy."

Nigel Farage renewed a pledge to scrap interest paid on reserves that commercial banks hold at the Bank of England, funds created during quantitative easing. He said Reform UK will implement the change despite bank objections and market alarm. Farage argued lenders have been benefiting unfairly from central bank policy and called the payments "free money" that should stop to ease pressures on public finances. Banking groups warned that removing the payments could damage financial stability, lending conditions and investor confidence. Farage dismissed bond market concerns and said he would take a contrarian approach to consensus views.

Read at Business Matters