**FAQs**

**1. Why is the Treasury giving £130bn to the Bank of England over the next five years?**
The Treasury is providing these funds to cover the losses incurred by the Bank of England, primarily due to quantitative easing and tightening measures.

**2. How does this affect public spending in the UK?**
The transfer of funds from the Treasury to the Bank limits the Chancellor’s ability to meet fiscal rules and invest in public services and infrastructure.

**3. What are some proposed solutions to reduce these costs?**
Some solutions include tiered reserves, slowing down quantitative tightening sales, and implementing a deferred asset system to smooth out the financial strain.

**4. How much could be saved through these reforms?**
Reforms such as tiered reserves and halting active sales could save billions of pounds annually, ultimately freeing up funds for public spending.

**Conclusion**

The current financial strain placed on the Treasury by the Bank of England’s losses calls for a reevaluation of the existing system. By implementing reforms such as tiered reserves, slowing down sales, and adopting a deferred asset system, the government could unlock significant funds for public spending. It is crucial to address these financial challenges to prevent unnecessary austerity measures and create a fairer monetary system that benefits the public. By taking action now, the government can ensure a more sustainable and effective financial framework for the future.