UK Labour Party May Hit Bank Deposits at BOE, UBS Analysts Say
- ECB-style tiering could raise £1.5 billion for public services
- Chancellor Hunt says proposal would hit bank competitiveness
Investors are starting to worry that a future Labour government could raise money for public services by reducing the amount commercial banks earn on deposits held at the Bank of England, analysts at UBS said.
Gordon Brown, the former UK prime minister and Labour leader, last month proposed changing the rules around the BOE’s quantitative-easing program in a sign the party might copy European Central Bank-style “reserves tiering” if it wins the election expected this year, as opinion polls project.