Bank of England's response to the report, Quantitative easing: a dangerous addiction?

This is the government's response, published 17 September 2021.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The Bank of England sets out where it agrees with the Committee's report on quantitative easing and where it does not, including disagreement with the Committee's conclusions on independence perceptions, growth impact and wealth inequality.

• On independence, the Bank says the suggestion that asset purchases aimed to finance the government deficit is "incorrect", and that the perception claimed by the Committee is "unsubstantiated".
• On effects, the Bank says the literature "does not support the EAC’s conclusion" that QE has had a limited impact on growth and aggregate demand, and says QE has benefited asset holders "in proportion to their asset holdings" rather than disproportionately.
• On research and communication, the Bank says its research agenda includes QE priority topics, "consistent with the EAC’s recommendation", and "intends to publish" a document summarising its latest thinking on QE.
• On tightening, the MPC "intends to begin reducing the stock of purchased assets when Bank Rate has reached 0.5%, if appropriate given the economic circumstances", and "intends to review the unwind process no later than two years after it has begun".

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