Would Cancelling QE Gilts Boost the UK Economy?

Britain is struggling with high levels of debt - but Morningstar's head of fund research Jeremy Beckwith has a potential solution, cancel all the Government Bonds bought through QE

Jeremy Beckwith 20 January, 2015 | 10:14AM

An Open Letter to Messrs. Osborne And Balls

Dear George and Ed,

Are you seeking a policy that you can surprise markets with on the first day after the General Election, just as Gordon Brown managed when he made the Bank of England independent in 1997, that you cannot talk about ahead of the election, but has no cost and will probably boost your chances of winning the 2020 election?

Well here it is – tell the Bank of England to cancel all the Government Bonds it has bought through its QE policy intervention in financial markets. I am sure your advisers have already produced papers looking into this for you. Obviously if one of you announces it before the election, the other will denounce it as dangerous and totally irresponsible but I think it works for whichever of you is Chancellor in May.

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About Author

Jeremy Beckwith  is Director of Manager Research for Morningstar UK

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