Rachel Reeves urged to reverse winter fuel decision after £10bn boost to UK economy

Chancellor Rachel Reeves has been urged to roll-back on her Scrooge-like cuts to winter fuel payments for millions of pensioners after the Bank of England announced a £10 billion boost to the British economy.

Ms Reeves has faced mounting criticism since announcing she was cutting the benefit for vulnerable elderly people this winter to help tackle what the Labour Party claim is a "£22 billion black hole" in the UK's finances left by the Conservatives. The Chancellor has said the move would save the treasury £1.2 billion a year.

But Ms Reeves' former employer, the Bank of England, revealed today that it was slowing the sale of government bonds stockpiled during the Covid lockdown.

Government bonds, also known as gilts, are a financial product that the UK government sells to investors in order to borrow money, they are a promise, a bond, to pay back the money in the future.

The process of dealing in bonds is known as "quantitative easing" and describes when central banks operate in financial markets to create new money to buy financial assets, mainly government bonds.

Baroness Altmann, a former pensions minister, said the Chancellor should use the extra room the slowdown in sales gives to reverse her decision on winter fuel payments.

She told the Telegraph: "The first thing you should do is make sure your citizens are safe.

"The poorest citizens at the moment have been left without protection for the winter. So the most urgent for me would be to restore the payments that people were expecting and needing, because the poorest pensioners are currently being left at serious risk this winter for no cogent reason."

The newspaper reports the Bank of England voted to reduce the number of gilts held by £100 billion over the next 12 months.

Bank of England policymakers on Thursday voted unanimously to reduce the stockpile of gilts held by £100bn over the next 12 months. The change could mean a £10 billion boost to the nation's coffers ahead of the October Budget announcement.

A Treasury spokesman said: "Decisions regarding quantitative easing and tightening are rightly for the independent Bank of England's Monetary Policy Committee.

"The overall gains or losses from the Asset Purchase Facility are highly uncertain and predominantly determined by interest rates and gilt prices. The OBR will make a full assessment at the October Budget."

Speaking to a number of broadcasters today, Sir Keir Starmer said speculating on next month's Budget will "put the fear of God" into people as he declined to rule out further tax hikes and cuts.

The PM repeatedly said he did not want to "get ahead of the Budget", due to be revealed on October 30, as he was asked to rule out measures such as scrapping the single person council tax discount and cutting the farming budget.

Asked about the single person council tax discount, which gives people living alone 25 percent off their council tax bill, he told BBC West: "I am really concerned about this and obviously I'm not going to pre-empt the Budget, but I don't want to risk putting the fear of God into people."

Sir Keir added: "I don't want to get into this, you know, 'Will you rule out? Will you rule out? Will you rule out?' because it just puts fear into people and I don't want to do that.

"What I will say is that I'm very conscious of how hard it's been for people and we intend to make sure that we have those people who have faced the greatest hardship in our minds' eyes when we take our decisions."