What is quantitative easing, and does it really work in boosting economic prospects? CBI experts answer your key questions on this central bank policy tool
27 Sep 2022, 3 min read
Key takeaways
- Quantitative easing (QE) is a term for when a central bank “prints” money to buy financial assets
- QE is believed to have boosted confidence among households, businesses and investors
- QE boosts asset prices, but there is very little evidence to suggest that this leads to wider inequality
In most advanced economies, a key mandate of central banks is to maintain price stability. Usually, this manifests in a target for inflation (the pace at which the aggregate price level rises) at a rate which is judged to be low, stable and/or in line with the economy’s growth potential. In the UK, the Bank of England targets a 2% rate of inflation (on the Consumer Price Index measure).
Adjusting interest rates is the main method by which central banks manage de
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