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UK taxpayers on the hook for £150bn for BoE's QE programme

Journalist: Jon King, Daily Express Online

ended 26. July 2023

HM Treasury will need to cover £150bn losses from the Bank of England's quantitative easing programme to 2033, according to Threadneedle Street's latest estimate. 

What implications does this have for taxpayers and the government ahead of the next general election?

The Daily Express is looking for strong views of two or three paragraphs.

4 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
QE is yet another failed policy by the central banks. It is a lot to do with the rapid rise in inflation as well. With so much extra money sloshing around the economy isn’t no wonder this pushes prices up.

Then Bank could easily have used the reverse, quantitative tightening, to deal with inflation but instead chose a more painful route- hiking mortgage rates for millions of middle income families. It shows that then stimulus is needed they help the rich, but when restraint is the order of the day, the pain lands on normal peoples
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Stuart Crispe
Founder at Sunny Avenue
Taxpayers are always left to clear up the mess, and the idea that we must simply accept paying taxes because "that's just how it is" doesn't make much sense to me. It means regular people could end up paying for mistakes made by the central banks that we are supposed to trust - and many feel they have failed us. It doesn't feel fair, especially in already difficult times. Such situations widen the gap between the rich and the poor. We should demand more transparency and fairness in how these losses are dealt with. Our leaders should prioritise what's best for the people instead of merely accepting high taxes as inevitable. It doesn't seem like that's how they think anymore.
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ken sutton
Director at WJ Sutton
The idea of QE made sense to me at the time. You normally boost the economy by reducing interest rates. This didn't work despite very low interest rates when adjusted for inflation.
So I understood the idea of buying bonds to release funds for boosting the economy. I assumed this would be financed by effectively printing money. This would be alright economically in the prevailing low inflation/low growth environment.
However, the BOE chose to borrow these funds from commercial banks thus nullifying some of the advantages of QE and exposing the country to losses when the interest rates rise. This isn't with the benefit of hindsight, the average undergraduate economist could have predicted. Shame on those more experienced ones at the BOE.
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David Robinson
Co-Founder at Wildcat Law
Globally central banks have pulled off an amazing "emperor's new clothes" routine with "Quantitive Easing". They have convinced nearly everyone that this was not what it actually was - namely printing money. Unfortunately this economic sleight of hand can only last for so long and now we are starting to pay the true cost. This is part of that bill, alongside inflation.