Fuel and travel costs are pushing prices up again
Thursday 5 November 2026
Inflation has risen to 3.1%, meaning everyday spending is getting more expensive just as household budgets are already under pressure.
Quantitative easing
A central bank creating electronic money to buy bonds, aiming to lower longer-term borrowing costs and support spending.
What it means
With quantitative easing (QE), the Bank of England creates money electronically and uses it to buy bonds that investors already hold, mostly UK government bonds. Buying can raise bond prices and lower their yields: the returns a buyer would expect at those prices. The aim is to make longer-term borrowing cheaper and support spending when the economy needs it. The Bank does not hand newly printed banknotes to households. QE may influence borrowing and investment, but it cannot guarantee that a particular person's mortgage rate will fall.
Example
Imagine the Bank buys government bonds from investors. If the extra demand pushes bond prices up, their yields fall. That may also put downward pressure on some other borrowing rates, although the change people actually see will vary.
Why it matters
QE often appears in debates about prices, debt and the economy. Knowing what is bought, and from whom, makes those debates easier to follow.
Also known as
QE
Related terms
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Bank Rate
The main interest rate set by the Bank of England, which influences rates on borrowing and saving.
Read more -
Government bond yield
The return a buyer expects from a government bond at its current price, usually shown as a yearly percentage.
Read more -
Inflation
A general rise in prices over time.
Read more -
Monetary policy
Decisions by a central bank about interest rates and other tools to influence spending and the pace at which prices rise.
Read more
Keep in the loop
News
Highlights from about the UK economy, the UK government and the UK public sector.
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