The UK's Central Bank bond decision may lead to the Chancellor facing a funding gap of £4 billion.

Jin10 data, September 15 - If the Bank of England stops actively selling government bonds in this week's critical decision, Chancellor of the Exchequer Reeves will need to raise an additional £4 billion ($5.4 billion) to keep the budget plan on track. Besides Thursday's interest rate decision, the Bank of England will also announce specific steps for reducing its crisis-era quantitative easing bond portfolio over the next 12 months - which could pose a severe challenge for Reeves, who is set to release the budget proposal on November 26. As the government bonds held by the Bank of England are currently in a loss position, the decision to slow the pace of reduction will increase the burden on British taxpayers. This is a significant blow for Reeves - having to raise as much as £35 billion after rising borrowing costs, weak growth prospects, and a series of policy reversals have drained fiscal buffers. The Bank of England now faces a dilemma: weighing the fiscal costs of slowing the sale of government bonds against the risk that continuing to require investors to buy bonds in large quantities may exacerbate instability in the financial markets. This month, the yield on 30-year UK government bonds has reached its highest level since 1998.