The Financial Market Impact of Quantitative Easing in the United Kingdom

Michael A. S. Joyce, Ana Lasaosa, Ibrahim Stevens and Matthew Tong
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Michael A. S. Joyce: Bank of England

International Journal of Central Banking, 2011, vol. 7, issue 3, 113-161

Abstract: This paper investigates the impact of the Bank of England’s quantitative easing policy on UK asset prices. Based on analysis of the reaction of financial market prices and modelbased estimates, we find that asset purchases financed by the issuance of central bank reserves - which by February 2010 totalled £200 billion - may have depressed medium to longterm government bond yields by about 100 basis points, with the largest part of the impact coming through a portfolio balance effect. The wider impact on other asset prices is more difficult to disentangle from other influences: the initial impact was muted, but the overall effects were potentially much larger, though subject to considerable uncertainty.

JEL-codes: E43 E44 E52 E58 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (346)

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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2011:q:3:a:5

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