A House of Lords committee is "concerned" about the Bank of England's quantitative easing (QE) programme, and is calling on the Bank to unwind the controversial monetary policy.

QE sees the Bank of England create new digital money that it uses to buy bonds and other assets from the private sector to increase investment and lending.

Introduced in March 2009 to staunch the worst of the global financial crisis, the policy has seen £895 billion injected into the economy ever since, including £450bn in 2020 in response to the pandemic.

The Economic Affairs Committee, however, says that the effects of QE are "poorly understood and in recent years, particularly during the COVID-19 pandemic, the Bank has struggled to explain why it was the appropriate response to particular economic circumstances".

One concern surrounds the risks of growing inflation. William Allen, visitor at the National Institute of Economic and Social Research, said he saw "a clear risk of inflation taking off" associated with QE.

Modern monetary theorist Richard Murphy of Tax Research UK, however, said "there is no evidence that the Government's deficit has created inflation", instead placing the blame for the UK's gradually rising inflation on withdrawal of COVID-19 business support and the Government's "failure to control COVID-19".

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