Since the Bank of England announced market operations to purchase gilts last Wednesday, Westminster politicos have been struggling to get their heads round the intricacies of gilt markets. It therefore comes as no surprise to Guido that Nick Robinson was forced into a correction today, after incorrectly repeating the widely tweeted claim that the Bank of England has spent “£65 billion to prop up the markets”:

The claim is somewhat misleading. The Bank of England pledged to buy gilts to the tune of a maximum of £5 billion a day, over two weeks, to assure markets. This means the maximum possible spend was £65 billion, though the actual number will be far smaller. In reality the bank has purchased around £3.66 billion so far, with yesterday’s purchases coming in at just £22 million. The smaller purchase signals the Bank is comfortable with the current state of gilt markets as its credible commitment appears to have paid off. Guido appreciates that the BBC this time took the effort to get the facts right…

Shadow Chancellor Rachel Reeves, who should know better as an ex-Bank of England employee, repeated the same line: “The fact the Bank of England had to step in with a £65 billion bailout with taxpayers money is deeply shameful.” It is not a fact.

Firstly, the market operation will be nowhere near £65 billion. Secondly, it is not money from taxpayers, it is from Treasury reserves, with the purchases even having the potential to make a profit* on resale. So her “taxpayers’ money” claim is also incorrect. Robbo we can excuse, he only has a PPE degree from Oxford. The Shadow Chancellor, a trained economist, is deliberately and wilfully misrepresenting the facts for political advantage…

*A market source says that marked-to-market the Treasury is currently in profit on the trade.