A previous agreement struck by the Treasury means it must make the Bank whole on any losses from its bond-buying spree during Covid and the financial crisis, known as quantitative easing (QE).
The Treasury has already transferred £23.6bn to the Bank this year alone to cover losses on so-called quantitative tightening (QT), which accounts for the sale of gilts.
Threadneedle Street’s decision to reduce the size of its balance sheet by actively selling gilts bought during the pandemic, rather than letting them mature, means taxpayers faced much heavier losses in the short term.
With interest rates at 5pc, the amount the Bank pays to commercial lenders on reserves held at the central bank also far outstrips returns on its stockpile of gilts.
The reverse was true when interest rates were at record lows, which saw £123.8bn in profits transferred to the Treasury between 2009 and 2022.
But fewer active sales in the coming year means the Treasury will be required to transfer less money to the Bank as losses crystallise more slowly, providing a boost for the Chancellor.
Analysts at Goldman Sachs have previously warned that losses on gilts are “weighing heavily on fiscal headroom”.