Did Rishi Sunak really make an £11 billion blunder?

Could Rishi Sunak really have saved the taxpayer £11 billion by insuring against higher interest rates last year? That was the extraordinary claim made by the National Institute of Economic and Social Research (NIESR) and in the Financial Times on Friday.

The NIESR claims that the government could have saved the money had the Chancellor taken up the institute’s own suggestion last year and forcibly converted £600 billion worth of reserves held by commercial banks at the Bank of England into two year fixed-rate bonds. By failing to foresee rising inflation and interest rates, the FT asserts, the Chancellor has blown even more money than Gordon Brown did by selling half Britain’s gold reserves at the bottom of the market in 1999.

That’s quite a charge, given that Brown’s mistimed sale of the gold reserves remains one of the most-remembered contributions to UK economy – no doubt because it conjures images of the film Goldfinger, and its massive stacks of gold the arch-villain planned to steal from Fort Knox.