What effect does Quantitative Easing have on inflation?
On Tuesday 23 February, the Economic Affairs Committee holds its third set of evidence sessions on its Quantitative Easing inquiry. In the first panel, the Committee will hear the Independent Evaluation Office’s perspective on the Bank of England’s Quantitative Easing programme. In the second panel, specialists give evidence on the impact of Quantitative Easing on investors and pension funds.
- How well does the Bank understand its Quantitative Easing (QE) programme?
- What are the consequences if markets, and the public, perceive QE as a mechanism for financing Government spending, rather than for inflation rate targeting?
- Has the Bank engaged adequately with discussion about the distributional effects of QE?
- Has the Bank provided a clear rationale for the quantity, type and maturity of assets it buys?
- How closely should the Bank and the Treasury work? At what point does independence become compromised?
- Through which channels, both internal and external, is the Bank accountable for its QE programme, and to whom?
- What do you think the purpose of QE has been during the COVID-19 pandemic?
- To what extent is QE viewed as a success by the markets?
- To what extent do investors think the Bank’s asset purchases will have an impact on inflation?
- What are the implications for financial markets if QE is not unwound in full and the Bank’s balance sheet remains large on a structural/permanent basis?