Bank of England 'overestimated' QE impact on gilts

The Bank of England has overestimated the impact of quantitative easing on gilt yields, the Bank for International Settlements (BIS) has said.

According to the FT, the BIS said further asset purchases by the Bank will have less impact on gilts and other securities. An article in the latest quarterly review from the BIS says the initial £200bn of quantitative easing lowered yields on government debt by a far smaller margin than the Bank estimated in its own study in September. The Bank said in September that QE had sent gilt yields down by 100 basis points on five and 10-year gilts. It also said QE had given the economy a boost of a between 1.5%-2%, while lifting inflation by between 0.75%-2.5%. However, the BIS article...