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1/This Bank of England arrangement with HM Treasury may not be a big deal. The normal arrangement in most countries is for the central bank to keep the government at arm's length. For example, in the US, the Fed purchases Treasuries from primary dealers... https://www.bankofengland.co.uk/news/2020/april/hmt-and-boe-announce-temporary-extension-to-ways-and-means-facility
2/not directly from the government. And, of course, those purchases are made at the Fed's discretion. In this instance, HM Treasury has the temporary right to borrow, at its discretion, from the BoE, apparently with no fixed maturity for the debt. Note, however, that the US...
3/Treasury currently has a substantial balance in its "general account" with the Fed, and that balance exhibits high volatility, which is out of the Fed's control. That's account balance is a debt of the Fed to the Treasury, but the issues are the same as in the UK case. In...
4/both cases the central bank can offset the fiscal authority's actions through open market operations.
