Yahoo Finance How Money Works: What on earth is quantitative easing?
Hundreds of billions of pounds have been poured into the UK's quantitative easing programme in an attempt to kick-start the economy. But what, exactly, is it and how was it meant to work? We explain all
We keep hearing about the Bank of England using quantitative easing (QE) in an effort to boost the economy.
Unlike what many think, it’s not about printing extra bank notes it’s all about buying assets from financial institutions, such as banks. Instead of using money it already has to do this, it just adds a few zeros to its accounts.
It would be handy if we could all do this whenever we felt like it, but only the Bank has this special power which forms part of its armoury to fight economic crisises.
But how does this help the economy? And, more importantly, has it ever worked?
Watch this video - which even manages to work Gary Lineker memorabilia into an explanation of how QE works - to find out whether it’s been a success.
