Bank of England sees £125 billion QE loss

The Bank of England has estimated that its quantitative easing programme will result in a net lifetime loss of around £125 billion ($169 billion), with the cost set to be covered by the British government.

The updated projection is higher than the central bank’s previous estimate of £115 billion in February and reflects changes in market conditions used to calculate the long-term impact of the scheme, News.Az reports, citing Reuters.

The QE programme was first launched in 2009 in response to the Global Financial Crisis, with the aim of supporting the economy by purchasing government bonds and injecting liquidity into financial markets.

Under an agreement between the Bank of England and the UK Treasury, any losses incurred by the programme are borne by the government. While the scheme generated profits during much of the 2010s, rising interest rates in recent years have reversed that trend.

The central bank said its latest estimate is based on current market rate expectations, highlighting the growing fiscal impact of the policy as borrowing costs remain elevated.

News.Az 

By Aysel Mammadzada