PRESS RELEASE: Positive Money response to Bank of England QE announcement

Responding to the Bank of England’s announcement today that it will buy an additional £200bn worth of government and corporate bonds through quantitative easing (QE), bringing total to £645bn, Fran Boait, executive director of Positive Money, said:

“Rather than buying corporate and government bonds from financial markets, a better alternative would be money created by the Bank of England going directly to households, through a form of quantitative easing for people. This is important for tackling the public health emergency, as it would help people make ends meet without putting themselves and others at risk by going to work.

“If the Bank of England is buying up government debt, the Treasury should take advantage of this to increase spending which combats the coronavirus crisis, such as additional health funding and payments to allow people to stay at home rather than risking their lives and the lives of others by going into work.

“There are questions about the extension of corporate bond purchases. The Bank of England’s corporate QE programme has previously seen the central bank buy up bonds from fossil fuel companies such as Shell, BP and Total. The new governor Andrew Bailey has pledged to decarbonise the Bank of England’s balance sheet, so he must stick to his word by not buying any high-carbon assets through this new round of corporate QE. The response to the coronavirus crisis must not jeopardise the response to the climate crisis.”

Notes

1. Responding to an open letter coordinated by Positive Money, Bank of England governor Andrew Bailey told the Treasury Select Committee in his pre-appointment hearing on 4 March that he will take forward shifting the make-up of the Bank of England’s corporate bond purchases to support the move towards net-zero carbon emissions “as a priority” https://positivemoney.org/2020/03/andrew-bailey-announces-crucial-step-towards-climate-friendly-bank-of-england/

2. Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org

3. For any questions or for interviews with a spokesperson please contact simon.youel@positivemoney.org.uk or 07817765517