Government's response to 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.

HM Treasury responds to six recommendations, saying it is not considering ceasing interest payments on reserves, will not publish the Deed of Indemnity, and would not instruct the MPC on how to support its green objectives.

• On distributional effects, the government says all public policy, including monetary policy, has distributional impacts, and that the Bank's research "forms part of this evidence base".
• On the Bank's mandate, the government says it "would not be appropriate" to instruct the MPC on supporting green objectives, as this "may interfere with the operational independence of the Bank".
• On debt management, HM Treasury "is not considering a policy of ceasing paying interest on reserves". The decision not to publish the Indemnity was "carefully considered" and is consistent with the approach since the Asset Purchase Facility began.
• On uncertainty over QE's effects, the Chancellor states only "I note the Committee's recommendations". On the remit, he reaffirms the 2 per cent inflation target, saying the commitment to price stability "remains absolute".

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