How we are all paying for the Bank of England’s failing QE programme – and what can be done about it.


The Bank of England’s forecast that it will make cumulative losses of more than £100 billion by the end of the decade through the Asset Purchase Facility, a cost borne by the Treasury – just as HSBC announced that it’s pre-tax profits for Q1 2024 were £10.1 billion.

it’s no coincidence that the UK’s largest private bank announced billions in profit on the same day the Bank of England continues to forecast losses of billions – both due to higher interest rates. 

The UK is unique in the way the Treasury covers the central bank’s losses from its quantitative easing programme, meaning the public is ultimately bearing the cost of a programme that stimulated stock prices rather than increasing household spending power after the financial crash.   

The Bank of England’s working paper Central bank profit distribution and recapitalisation (published last month) suggests the UK is the only rich country where losses are passed onto the Treasury.

There are a number of ways the public could claw back billions of pounds in subsidies that are boosting bank profits, ranging from the windfall taxes and ‘tiered reserves’ adopted across Europe, to the introduction of a digital pound.”

Our latets paper, The fiscal benefits of a digital pound(also published last month) finds that £30 billion for the Treasury every year could come from issuing a digital pound.

We also found (in February 2024) that a windfall tax on the profits of the big four banks could raise between £3.5 and £14 billion.  

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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