Quantitative easing is the Bank of England creating money to buy assets like government bonds. Its holdings have fallen from a GBP895bn peak to GBP523bn.
Last reviewed: 1 July 2026
|
MONEY GUIDES |
Quantitative easing (QE) is when the Bank of England creates new money electronically and uses it to buy financial assets, mainly UK government bonds, to support the economy when cutting Bank Rate alone is not judged to be enough.
|
KEY FACTS
|
How QE is meant to work
By buying government bonds, the Bank pushes up their price and pushes down the yield, or effective interest rate, on them. This is intended to lower borrowing costs more broadly across the economy and encourage banks to lend the newly created reserves onward, supporting spending and investment when the economy needs a boost.
QE holdings and the move to quantitative tightening
| Milestone | Bank of England Asset Holdings |
|---|---|
| Peak | £895 billion |
| 10 June 2026 | £523 billion |
| Planned further reduction (to Sept 2026) | £70 billion, agreed Sept 2025 |
|
Asset holdings: peak vs current Peak QE holdings: 100% Holdings as of 10 June 2026: 58% |
What quantitative tightening involves
Quantitative tightening (QT) is the reverse process: the Bank reduces its bond holdings, partly by simply letting bonds mature without reinvesting the proceeds, and partly by actively selling some bonds into the market. QT is intended to gradually unwind the extra stimulus QE provided once it is no longer needed.
|
Worked Example: Why QE and Bank Rate are different tools Bank Rate changes the cost of borrowing and saving directly and can be adjusted in small steps at regular meetings. QE instead directly changes the amount of money and bonds in the financial system, and adjustments are typically larger and longer-lasting than a single Bank Rate move, which is why the Bank tends to reserve QE for periods when cutting Bank Rate to very low levels is not judged sufficient on its own. |
|
This article is general information, not financial or legal advice. Rules and limits can change: always check the current position with the regulator or scheme concerned before relying on any figure here. |
Is quantitative easing the same as printing money for the government to spend?
No. The Bank creates money to buy existing financial assets in the market; it does not hand newly created money directly to the government to spend.
Is the Bank of England currently doing QE or QT?
As of mid-2026, the Bank is in a quantitative tightening phase, reducing its asset holdings from their pandemic-era peak.
|
Related Guides |
|
Sources |
