Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential merits of (a) reducing or (b) removing the interest paid to commercial banks on the reserves those banks hold with the Bank of England.

Monetary policy, including quantitative easing, is the responsibility of the independent Monetary Policy Committee at the Bank of England. The separation of fiscal and monetary policy is a key feature of the UK’s economic framework, and essential for the effective delivery of monetary policy, so the government does not comment on the conduct or effectiveness of monetary policy.

Paying interest on reserves is an important part of the transmission of monetary policy to the real economy. There are no plans to change the way reserves are remunerated at the Bank of England. The government is providing the stability required for the independent Monetary Policy Committee to bring inflation to target, by managing the public finances responsibly.