The Bank of England's recent adjustment in bond portfolio management has potentially freed up £10 billion for UK Chancellor Rachel Reeves. This change allows for a recalibration of the central bank's cash buffer, which safeguards against unexpected losses on bond holdings.
Chancellor Reeves and BOE Governor Andrew Bailey have agreed to reduce the reserve, resulting in the Treasury transferring less money to the Bank of England. This strategic move is expected to effectively manage the UK's borrowing levels in the future.