Committees

Quantitative Easing inquiry launched by Lords Economic Affairs Committee

27 January 2021

The Economic Affairs Committee launches its inquiry into Quantitative Easing and invites written contributions to its investigation. The deadline for submissions is 26 February 2021

Focus of the inquiry

The Committee will examine Quantitative Easing in the context of the Bank of England’s operational independence, its accountability and the transparency of its decision-making. The Committee will also examine the economic effects of Quantitative Easing, what risks are entailed, its distributional impacts and the future of the programme.

Questions

The Committee is seeking answers to the following questions:

  1. Has the expansion of the Bank of England’s Quantitative Easing programme undermined the independence of the Bank, or the perception of its independence? What are the implications of this?
  2. How well has the Bank of England communicated its decisions on Quantitative Easing? Is the programme transparent enough?
  3. Should the Bank of England’s mandate be altered?
  4. How should Quantitative Easing be defined?
  5. What were the original objectives of Quantitative Easing and have they changed?
  6. Has Quantitative Easing been successful and how should success be measured?
  7. What trade-offs does the Bank of England’s Quantitative Easing programme entail? What effect might it have on inflation?
  8. What have been its distributional effects?
  9. How does the Bank of England’s Quantitative Easing programme compare to other programmes internationally?
  10. Could the expansion of Quantitative Easing in the UK create the possibility of economic stability being undermined in the future? If so, how?
  11. What evidence is there for any upper limits to the Bank of England’s Quantitative Easing programme?
  12. Will Quantitative Easing be unwound in full, and if so how? Is it likely that the Bank of England’s balance sheet will be permanently, and structurally, larger going forwards?

The Committee is looking to hear from as diverse a range of views as possible—if you think someone you know would have an interest in contributing to the inquiry, please pass this on to them.

Please read the call for evidence document above for full details on the inquiry. The deadline for submitting written evidence is 26 February 2021.

Chair's quote

Lord Forsyth, Chair of the Committee, comments:

“The Bank of England began its programme of Quantitative Easing to temporarily support the economy in the aftermath of the Global Financial Crisis. 12 years on it has bought some £895 billion of Government and corporate bonds.

“This is an eye-watering amount and the public has largely been left in the dark about its potential long-term impact on the nation’s finances. This inquiry will examine the governance and accountability of Quantitative Easing, its impact on the economy, and what its limits are.

“To inform our work we want to hear from as broad a range of people as possible. If you have a view on an aspect of Quantitative Easing, look at our call for evidence and let us know what you think.”

Further information

Image: PA