Part 9/11:
Quantitative Easing (QE) has played a pivotal role in shaping the UK’s financial landscape, especially following the economic fallout from previous crises. The Bank of England had, at one point, amassed a staggering £900 billion in bond purchases, but it is currently reversing this approach. The implications of this retraction lead to heightened borrowing challenges amidst already rising bond yields, creating a complex environment for government financing.
A sweeping narrative exists that links the act of printing money as a precursor to inflation, with historical precedents corroborating this notion. However, the experience in the UK has shown that QE did not lead to significant inflation escalation during its peak usage.