Written question asked by Bishop of St Albans (Bishops (affiliation)) on Tuesday, 8 December 2020, in the House of Lords. It was due for an answer on Tuesday, 22 December 2020. It was answered by Lord Agnew of Oulton (Conservative) on Monday, 21 December 2020 on behalf of the Treasury.

Monetary Policy

Question: To ask Her Majesty's Government, further to the Written Answer by Lord Agnew of Oulton on 3 December (HL10488) and the exchange of letters between the Bank of England and HM Treasury on the Asset Purchase Facility on 29 January 2009, what assessment they have made of the implications of the confirmation in these letters that the financing of the Asset Purchase Facility by central bank money would require HM Treasury consent for the question of whether it is appropriate for the Government to comment on the effectiveness of quantitative easing; and what assessment they have made of the effects of quantitative easing on the increase in house prices compared to increases in wages.

Answer: The Bank of England’s Asset Purchase Facility is indemnified by HM Treasury. Due to this indemnity any decision to increase the limit of purchases to be financed through the issuance of central bank reserves requires Chancellor authorisation. However, the judgement of what size and composition of the Asset Purchase Facility is warranted is for the independent Monetary Policy Committee. The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, and the Government does not comment on the conduct and effectiveness of monetary policy.

Secondary information

Type: Written question
Reference: HL11243
Session: 2019-21
Related items: Monetary Policy
Thursday, 3 December 2020
Written questions
House of Lords
Grouped for answer: Yes
Subjects: Housing Increases Pay Prices Monetary policy
Link: View this Written question on www.parliament.uk