Question to the HM Treasury:

To ask Her Majesty’s Government what oversight they exercise of the quantitative easing programme to manage its risk under the HM Treasury Indemnity.

The UK’s monetary policy framework, set out in the Bank of England Act 1998, gives operational responsibility for monetary policy to the independent Monetary Policy Committee (MPC). The MPC makes decisions on its policy tools, including quantitative easing, in order to meet the 2% inflation target in the medium term.

The framework for the Asset Purchase Facility (APF), authorising it to be used as a monetary policy tool, was set out in the exchange of letters between the then Chancellor of the Exchequer and the then Governor of the Bank of England on 29 January and 5 March 2009. The framework requires the Chancellor to authorise the ceiling on total asset purchases by the APF, given the indemnity the Treasury provides for the facility.