LONDON, (Reuters) – A think-tank estimates that British taxpayers face an 11 billion-pound ($13.7 Billion) loss due to Rishi Sunak’s failure to heed their advice about how to manage public finances in the context of rising interest rates.

The National Institute of Economic and Social Research warned last year that the Bank of England could lose the profits it made on its bond-buying stimul programme.

Investors who sold their gilts to BoE received new BoE money. This pays interest at the BoE’s principal interest rate.

NIESR asked the government to convert investors’ reserve into fixed-interest securities with a short and medium term to safeguard against rising short-term interest rates.

NIESR stated Friday that costs now stand at approximately 11 billion pounds. The BoE increased its benchmark rate from 0.1% to 1.0% between December and May. It warned of an even greater hit if rates increase further as it is expected.

Jagjit Chadha (NIESR Director) stated, “Our calculations show the importance of managing government debt.”

“It would be much better to have decreased the size of short-term liabilities sooner than we have argued for some while and to reap the benefits from longer-term debt issuing. It is a very important question that the Treasury should answer.

NIESR’s proposal would have “hugely damaged” the credibility of Britain’s public finance management, according to NIESR’s response.

According to a Treasury spokesperson, “Proposals like this could undermining independence of Bank of England” and would force banks to swap their reserves for gilts. This would constitute financial repression.

“The eleven-billion-pound number is based upon the absurd assumption that such large-scale action could be achieved in one transaction.”

NIESR’s initial findings were first reported by the Financial Times. It said that the estimate cost was higher than what former Labour Finance Minister and Prime Minister Gordon Brown (of Sunak’s Conservative Party) claimed they lost in 2003 to 2010 through low-priced gold sales.

($1 = 0.8019 pounds)