Q.E.

Quantitative easing: Risks vs benefits

Quantitative easing: Risks vs benefits

Readers Question: Could you comment on This BBC programme on Q.E. The programme highlights several criticisms of Quantitative Easing, especially the Q.E. adopted by the Bank of England. Since 2009, the Bank of England’s balance sheet has quadrupled, and now a third of all government bonds are now held by Bank of England. The programme fears this is storing up future inflation and a possible loss of confidence in the bond market. Firstly, just to recap: Quantitative easing involves Central Bank creating money electronically Using this electronic money to purchase bonds (mostly government bonds) The…