Quantitative easing, monetary policy implementation and the public finances

Now that interest rates are rising, the interaction of quantitative easing (QE) with the Bank of England’s current methods for implementing monetary policy will add to strains on the public finances. These could, and arguably should, have been avoided by prompt, forward-looking action from around 2019 when the materiality of the risk became apparent. As of now, however, there are no easy options. READ FULL PDF