'Untested' quantitative tightening was 'leap in the dark' for Bank of England

Treasury Committee report

The Treasury Committee has criticised the Bank of England for not taking into consideration the “broader economic consequences” of its quantitative tightening programme.

In a report on QT, the committee found that, despite the strategic framework and rationale for the programme being "broadly reasonable", the BoE is "uncertain" about the impact it may have on the macroeconomic and money supply space. The report stated the committee is "concerned that the Bank is taking a ‘leap in the dark' by embarking on a major operation without specifically and separately tracking its effects". The central bank expected QT to have a "small impact" on the economy in the short term, but the report also noted the BoE has been "candid that the likely macroeconomic impa...