Recommendation 15

The Treasury indemnifies the activities of the Bank of England’s Asset Purchase Facility. This means that the Treasury receives any profits from QE but is also liable for any losses. The OBR told us that until very recently, QE was making “quite considerable profit” for the Treasury – and that between 2009 and 2022, the Treasury received cumulative gains of £124 billion. The Treasury told us that this changed from May 2022, when the Bank of England started raising interest rates, causing the Treasury to so far cover costs of £38 billion. The OBR estimated that over the lifetime of QE and quantitative tightening, the government will incur a net loss of £126 billion. When asked what impact this lifetime loss had on departmental spending, the OBR said that it affects government’s objective for getting “debt under control”.26