At the onset of the global health emergency three years ago, the Bank of England and other big central banks around the world crashed interest rates to zero and pumped billions of pounds into financial markets through their quantitative easing bond-buying programmes. Aimed at softening the edges of the worst recession in three centuries by supporting businesses, households and governments with lower borrowing costs, the report found the policies also helped inflate asset prices, helping to line the pockets of wealthy investors.
The Equality Trust said this had contributed to the number of UK billionaires increasing from 147 in 2020 to 177 this year, with the median billionaire now holding about £2bn.
“This sudden explosion in extreme wealth was in large part due to measures aimed at lessening the impact of Covid-19 on the economy, as central banks pumped trillions of dollars into financial markets, leading to a stock market boom which effectively lined the pockets of shareholders,” Jo Wittams, co-executive director of the Equality Trust, said in a report published on Monday.
So now we’re looking to call that QE money back in. Allow those BoE owned gilts to mature, not rebuy in the market, and so reduce those trillions pumped into the financial markets. Assuming that the analysis here is correct – and there’s definitely some truth to it – then that action will reduce that wealth disparity. Which is good, according to these folks.
Reverse MMT policies in order to reduce wealth inequality. Well, OK, boats floated and all that…..