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What is quantitative easing?

Quantitative easing (QE) is the Bank of England’s scheme to boost the economy by buying government debt. Essentially the Bank of England creates new money and uses it to buy loans to the UK government (commonly known as gilts).

The desired effect is that whichever organisation sells gilts to the Bank of England will now have money to spend or to lend to others.

It is hoped this extra money supply will increase spending in the UK economy and this will generate growth in the economy.

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