Did QE cost taxpayers?

Claims that the Bank of England’s programme cost billions are a red herring

SO MANY MONETARY POLICY decisions have been wrong in the last few years that it is not surprising that politicians and journalists spend time looking out for yet another cock-up. According to numerous media reports, the Bank of England’s programmes of “quantitative easing” are “costing the state” — and hence “the taxpayer” — many tens of billions of pounds. An apparently well-informed demand is then made for a major rethinking, or even the permanent abandonment, of QE-type activities. This is a herring of the deepest vermilion. The essence of QE operations was that the Bank of England borrowed money from the commercial banking system (by adding to its cash reserves) and used the proceeds to purchase government securities (sometimes known as “gilt-edged securities”, or “gilts”) from non-banks. The effects were…

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The Critic (Digital) - 1 Issue, June 2024

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