Reforming Bank of England reserve interest could unlock £100 billion a year, argues Trafalgar Analytics in fifth Insights briefing

FOR IMMEDIATE RELEASE

Think Tank: Reforming Bank of England reserve interest could unlock £100 billion a year, argues Trafalgar Analytics in fifth Insights briefing

LONDON, 8th February 2026 — Trafalgar Analytics has today published the fifth edition of its "Data & Decision Insights" briefing paper, the think tank's first Insights briefing of 2026, reflecting on the political and economic issues of the past year and previewing what lies ahead for Britain.

In "Rethinking Monetary Policy: An Overview," Associate Greggs Patriot examines the growing debate around the Bank of England's practice of paying interest on commercial bank reserves, a policy criticised by Reform UK Deputy Leader Richard Tice and defended by Bank Governor Andrew Bailey. Patriot's article identifies four structural levers, including (1) reducing interest paid on reserves, (2) increasing structural demand for gilts, (3) capturing a greater share of seigniorage, and (4) reshaping fractional-reserve banking. On conservative assumptions, this could unlock a combined fiscal space "plausibly approach[ing] £100 billion a year."

Inside the Fifth Insights Briefing

The fifth Insights briefing carries eight separate pieces from across Trafalgar's research teams:

• State of the British Economy 2026: the Economics & Growth Team argues that mainstream forecasting has focused too narrowly on GDP growth, inflation, and Westminster leadership speculation, while structural risks deserve far greater scrutiny in 2026. These risks include the OBR's credibility, the UK's unusually high share of inflation-linked debt, elevated gilt yields, and tax system complexity.

• New Year's Resolutions for Reform UK: Associate Bukes sets out two goals for Reform UK ahead of May's English local elections and the Senedd and Holyrood elections, from building legitimacy as Britain's pre-eminent opposition party to continuing the expansion of its electoral coalition without diluting its distinct insurgent identity.

• Jury Reform Hysteria: Four Counter-Arguments: Associate Eulipotyphla challenges Right-wing criticism of Labour's jury trial reforms, tracing the history of the Magna Carta and jury eligibility to argue the reforms are more modest than the political reaction suggests.

• Further pieces from the International Affairs Team on military purges in China and the new US National Security Strategy, and from the Elections & Polling Team assessing Danny Kruger's civil service reforms, alongside the Trafalgar Team's outlook for the year ahead.

The briefing also pays tribute to the late Peter Whittle (1961–2025), former London Assemblyman (2016-21), Founder of the New Culture Forum, and Convenor of The Trafalgar Group, a cross-party discussion forum based in central London.

"Peter meant so much to so many of us across the Right-of-centre. As Convenor of The Trafalgar Group, our namesake, he was pivotal to our founding at Trafalgar Analytics, and we will never forget the time he gave to us. We will remember his kindness, character, and the lasting institution he built in the New Culture Forum. Godspeed, Peter," said Lewis Appleby, Associate (Operations), Trafalgar Analytics.

Additional Information

The full fifth edition of Trafalgar Analytics' Data & Decision Insights is available here.

Media Contact

Sarah Moore (Senior Communications Officer), Trafalgar Analytics

media@trafalgaranalytics.co.uk

ENDS

NOTES TO EDITORS

• This briefing was edited by the Insights Team, with contributions from the Economics & Growth Team, Greggs Patriot (Associate, Economics & Growth), Bukes (Associate, Strategy), Eulipotyphla (Associate), the International Affairs Team, the Elections & Polling Team, and the Trafalgar Team.

• Comments to the media provided by Lewis Appleby, Associate (Operations), Trafalgar Analytics.

• The full briefing, "Data & Decision Insights #5," is available here.

• For more information or interview requests, please contact Sarah Moore on media@trafalgaranalytics.co.uk.

• Trafalgar Analytics is a British data analytics and research centre. Its work sits at the intersection between data science, economics, and political science. It believes in a data driven approach for tackling the foremost societal, economic, and political challenges of our time.