Rishi Sunak has lost almost £11bn of taxpayers’ money by paying too much interest on government debt.
The National Institute of Economic and Social Research said the chancellor had failed to take out insurance against interest rate rises on almost £900bn of reserves created by the quantitative easing process.
Last year, when the official rate was 0.1%, the institute recommended the government insure the cost of servicing this debt against the risk of rising interest rates by converting it into government bonds with a longer maturity.
The government’s failure to act, despite Sunak regularly warning about the risks of higher inflation and interest rates on the cost of servicing government debt, has now cost taxpayers £11bn, it said.
The loss to taxpayers is greater than the amount Conservatives have accused former Labour chancellor and prime minister Gordon Brown of costing the UK between 2003 and 2010, when he sold more than half of the nation’s gold reserves at rock-bottom prices.
