Did the Bank of England's quantitative easing programme become fiscally wasteful?

Michael Bleaney

No 2024/01, Discussion Papers from University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM)

Abstract: Nearly half of the government bonds purchased under the Bank of England’s Quantitative Easing (QE) programme were bought in 2020-21, when long-term real yields on indexed debt were well below zero and therefore almost bound to entail a sizeable loss to taxpayers. In addition to this expansion of QE, some maturing issues from earlier rounds were rolled over at this time. In so far as QE had the intended effect of raising the prices of the assets bought, the marginal loss per £ increased with the size of the QE programme. There is no evidence that this marginal effect, or the risk that a sizeable QE programme might have a substantial fiscal cost, was taken into account by the Bank’s Monetary Policy Committee or by the Government in its instructions to the Committee.

Keywords: interest rate; monetary policy; quantitative easing (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ban, nep-cba and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcfc:2024/01

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