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Inquiry into Quantitative Easing launched by Economic Affairs Committee

Wednesday 27 January 2021

The House of Lords Economic Affairs Committee, chaired by Lord Forsyth of Drumlean, today invites written submissions to its new inquiry on Quantitative Easing.

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. It will also consider the economic effects of Quantitative Easing, what risks are entailed, its distributional impacts and the future of the programme.

The Committee is seeking answers to the following questions:

  1. Has the expansion of the Bank of England’s Quantitative Easing programme undermined 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. What were the original objectives of Quantitative Easing and have they changed?
  5. Has Quantitative Easing been successful and how should success be measured?
  6. What trade-offs does the Bank of England’s Quantitative Easing programme entail? What effect might it have on inflation?
  7. What have been its distributional effects?
  8. How does the Bank of England’s Quantitative Easing programme compare to other programmes internationally?
  9. Could the expansion of Quantitative Easing in the UK create the possibility of economic stability being undermined in the future? If so, how?
  10. What evidence is there for any upper limits to the Bank of England’s Quantitative Easing programme?
  11. 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?

Lord Forsyth of Drumlean, Chair of the Economic Affairs Committee, said:

“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.”

The deadline for the submission of written evidence is 26 February 2021.
Read the call for evidence and find out how to submit evidence.

In the last two years the Economic Affairs Committee has published reports on the impact of the coronavirus pandemic on employment, Universal Credit, social care, High Speed 2, measuring inflation and post-school education. Following the publication of these reports the Government announced a review of its own social care policy and an independent review of High Speed 2.
The Committee’s post-school education report called for a change to how student loans are recorded in the public finances. Within six months of publication the Office for National Statistics did just that and reclassified as public spending the amount of student loans expected not to be repaid

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