Economists have advised UK Chancellor John Healey to urge the Bank of England to slow its bond-selling program, which has already cost the government billions of pounds. The Bank’s Monetary Policy Committee (MPC) is responsible for setting interest rates and deciding the pace of selling government bonds, known as gilts. These bonds were originally purchased during the 2008 financial crisis through a policy called "quantitative easing" (QE), which involved injecting money into the economy by buying government debt. Now, the Bank is reversing this process through "quantitative tightening," selling these bonds back to the market to reduce inflation. However, this has led to significant financial losses for the government, as the value of the bonds has fallen, increasing borrowing costs and inflation. The cost of borrowing for the UK government has reached its highest level in decades, driven in part by rising oil prices due to the Middle East conflict. The yield on the benchmark 10-year gilt recently surpassed 5.4%, the highest since July 2007, while the 30-year gilt yield reached 5.93%, the highest since March 1998. Earlier this year, the Bank of England estimated that its current policy could result in losses of up to £120 billion to the government if interest rates continue to rise as expected. The Bank’s governor, Andrew Bailey, has defended the policy, stating that the MPC is not responsible for limiting short-term costs to the government. Despite the growing concerns, the Bank has signaled that it will continue bond sales, though at a slower pace than initially expected. Critics argue that the Bank of England is not adequately addressing the financial burden its policies are placing on the Treasury, especially as Chancellor Healey prepares to deliver his first budget. Cabinet Office chief Louise Haigh has previously warned against policies that could damage the government’s financial position, but Healey has reportedly rejected calls to take a firm stance with the Bank, instead seeking assurances that the central bank will consider the impact on the Treasury. Former Bank of England officials and economists have raised concerns about the lack of coordination between the Bank and the government. Charlie Bean, a former deputy governor, suggested that the MPC should involve the Treasury more closely to avoid excessive financial strain. Similarly, John Llewellyn, an economist, argued that the separation between the Bank and the Treasury is not realistic and that cooperation is necessary to minimize costs. The Bank has sold nearly £385 billion worth of bonds since late 2022, significantly reducing its portfolio. However, its approach has been more expensive compared to other central banks, such as the European Central Bank and the U.S. Federal Reserve, which have either slowed or halted their bond sales. The Office for Budget Responsibility estimates that continued bond sales could add £47 billion to government debt by 2031. The Bank of England and the Treasury have not commented on these concerns.