A turning point for monetary policy

Monetary policy measures have an effect on public sector debt management, not only quantitative easing/tightening but also the pattern of interest rate changes. As public sector debt ratios rise, the sensitivity of debt management issues to monetary policy decisions will increase. This column explores some of the likely consequences of this by comparing the pattern of official rate changes in the period 1975-1980, when debt management played a major role in the attainment of monetary targets, with the period 2008-2023, when there was no such concern about interactions between debt management and monetary policies.