Essay question: what was the most consequential British public policy decision taken in the last 10 years?
Clue: it wasn’t David Cameron’s call on an EU referendum. It wasn’t even done by a politician.
The biggest thing in British public life since 2008 has been the Bank of England’s emergency stimulus package for the UK economy. It probably averted an even worse economic crisis. It possibly allowed or perhaps necessitated the Coalition’s fiscal austerity. And it skewed the distribution of economic advantage in favour of people who own stuff, especially houses.
How the assets of the rich have soared thanks to QE and low interest rates. Chart from Bank of England / Andy Haldane: How Monetary Policy Affects Your GDP
Whether or not quantitative easing increases income inequality is still up for debate (even the BoE’s economists aren’t really sure) but it’s less contentious to suggest QE boosted house prices by making credit for purchasing housing assets cheaper.
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