QE ‘likely to see rise of £300bn in spend’

THE BANK of England’s £435bn Government bond-buying programme is likely to bring about a £300bn increase in overall spending in Britain, equivalent to three times annual public health spending, the Bank’s chief economist said.

Andy Haldane also said the quantitative easing programme would lead to the central bank holding around a third of the stock of British government bonds by 2018.

The Bank of England announced an expansion of its QE programme in August, along with a cut in interest rates, as it sought to offset the hit to the economy from the country’s decision to leave the European Union.

The central bank voted to increase the total amount of bonds it would buy by £60bn, after previously buying £375bn of public debt between 2009 and 2012.

Two weeks ago Prime Minister Theresa May publicly criticised what she called the “bad side effects” of the Bank’s policy of lowering interest rates and buying Government bonds.

Mr Haldane made the comments in a presentation on QE at the Cass Business School in London. Mr Haldane, who was born and educated in Guiseley, near Leeds, was once named by Time Magazine as one of the 100 most influential people in the world.

He is a member of the Bank’s Monetary Policy Committee and he also has responsibility for research and statistics across the Bank.

He is honorary professor at the University of Nottingham, and a visiting fellow at Nuffield College, Oxford.

Mr Haldane is also chairman and co-founder of Pro Bono Economics, a charity which brokers economists into charitable projects.