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SOME QUESTIONS ... THE BANK OF ENGLAND’S CREATED HOW MUCH MONEY?! ... Since the financial crisis how much new money has the Bank of England created?

Burgess COMMENTARY

Peter Burgess

Positive Money THE BANK OF ENGLAND’S CREATED HOW MUCH MONEY?! Since the financial crisis how much new money has the Bank of England created? £450,000? £445 million? £445 billion? Since 2009, the Bank has created £445 billion of new money. Following the financial crisis of 2008, the Bank created £375bn. Following the Brexit vote in 2016, the Bank created a further £70bn. Data source Where did the Bank of England spend this money? On building affordable homes? On green energy infrastructure like wind and solar farms? On the financial markets? The Bank used the new money to buy financial assets from private investors like pension funds and insurance companies. This has pushed up the value of those assets, delivering a knock-on boost to property prices. But this is problematic for several reasons. Higher asset prices mean more financial instability and inequality, as well as higher house prices for everyone. Spending money in this way also does little to support investment in businesses which create jobs. So even though the Bank has been creating billions of pounds, wages have remained low, and ordinary people haven’t see the benefit. Data source How much wealth has a household in the richest 20% gained since the financial crisis? Nothing? £314? £314,413? Bank of England data shows since 2008, the 32% recorded increase in net wealth of the richest fifth of households reflected a £314,143 increase in net worth (from £987,209 per household to £1,301,352). Data source How much has a household in the poorest 20% gained in the same period? £1,659? £165,900? £1,659,000? The 43% recorded increase in net wealth of the poorest fifth of households reflected a £1,659 increase in net worth (from -£3,896 in 2006-08 to -£2,237 in 2012-14). The wealth gain for the top fifth was therefore 189 times that of the lowest. Data source How much have the richest 1% gained? Nothing? £100,000? £1m? The Bank’s own analysis in 2012 showed that £335bn of QE may have directly contributed to a £600bn increase in UK household financial wealth, suggesting that the current total of £445bn QE may have prompted a total increase of £800bn. With the top 1% of UK households owning 20% of net wealth, this would mean that each of these households gained an average increase in financial net wealth of £590,000. When combined with dramatic increases in non-financial wealth – including housing – the top 1% of households are likely to have benefitted by more than one million pounds each. Data source Since 2010, we’ve been working together with our network of thousands of supporters, economists and friendly MPs, to expose the truth and build a money and banking system that supports a fairer more sustainable economy. To see more of what we've been up to recently, please check out the Positive Money website. This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. Sitemap | Privacy Policy, Terms & Conditions