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You can find the current article at its original source at https://www.theguardian.com/business/2016/oct/19/bank-of-england-rebuts-may-and-hagues-attacks-on-quantitative-easing
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| Bank of England rebuts May and Hague's attacks on quantitative easing Bank of England rebuts May and Hague's attacks on quantitative easing | |
| (2 months later) | |
| The Bank of England has hit back at attacks by Theresa May and Lord William Hague on its money creation programme by pointing to the beneficial impact on the economy of the quantitative easing (QE) announced in its emergency post-Brexit stimulus. | The Bank of England has hit back at attacks by Theresa May and Lord William Hague on its money creation programme by pointing to the beneficial impact on the economy of the quantitative easing (QE) announced in its emergency post-Brexit stimulus. |
| A paper co-authored by Andy Haldane, Threadneedle Street’s chief economist, said there was evidence the surprise announcement of additional bond buying had reduced long-term borrowing costs for the government and business, raised share prices and boosted exports through a lower exchange rate for the pound. | A paper co-authored by Andy Haldane, Threadneedle Street’s chief economist, said there was evidence the surprise announcement of additional bond buying had reduced long-term borrowing costs for the government and business, raised share prices and boosted exports through a lower exchange rate for the pound. |
| QE has come under scrutiny in recent weeks as a result of comments by the prime minister in her Conservative conference speech about the bad “side effects” of the policy and Hague’s assertion that a scheme introduced in emergency conditions in 2009 had become “unpopular and counter-productive.” | QE has come under scrutiny in recent weeks as a result of comments by the prime minister in her Conservative conference speech about the bad “side effects” of the policy and Hague’s assertion that a scheme introduced in emergency conditions in 2009 had become “unpopular and counter-productive.” |
| The Bank said its analysis of QE – both in the UK and in other parts of the world – had yielded three key results. | The Bank said its analysis of QE – both in the UK and in other parts of the world – had yielded three key results. |
| First, the purchase of assets by central banks had a “significant” impact when they were explicitly used as a tool of monetary policy. Second, the impact varied over time and depended on how the economy and the financial markets were faring. Finally, the impact of QE had strong cross-border effects, with evidence that the actions of the US Federal Reserve had an influence on the UK economy as large as that on the American economy. | First, the purchase of assets by central banks had a “significant” impact when they were explicitly used as a tool of monetary policy. Second, the impact varied over time and depended on how the economy and the financial markets were faring. Finally, the impact of QE had strong cross-border effects, with evidence that the actions of the US Federal Reserve had an influence on the UK economy as large as that on the American economy. |
| The Bank said the comprehensive package announced by its monetary policy committee on 4 August to dampen the shock of the EU referendum result provided a “clean case study of the impact QE might have on financial markets and the various asset market channels in operation. | The Bank said the comprehensive package announced by its monetary policy committee on 4 August to dampen the shock of the EU referendum result provided a “clean case study of the impact QE might have on financial markets and the various asset market channels in operation. |
| “The effects on the yield curve, equity prices, corporate bond spreads and the exchange rate were all large and significant, consistent with a material loosening of credit conditions.” | “The effects on the yield curve, equity prices, corporate bond spreads and the exchange rate were all large and significant, consistent with a material loosening of credit conditions.” |