After more than a decade of QE, central banks are now reducing the amount of government debt on their balance sheets. This policy is known as Quantitative Tightening (QT). The consequences are not well understood. Is QT merely an operational adjustment or does it have macroeconomic effects? Should monetary policy makers take the effects into account? Is the UK experience different from other countries? What are the fiscal costs of QT and how can those be lowered?

This will present a framework to examine these questions, exploring what can be learned from previous studies of QE. The proposed framework suggests that current UK QT estimates could be underestimating the overall effects of this policy. In the UK, QT has also been a significant drag on public finances. Several proposals seek to lower these costs through higher taxes or changes in accounting conventions. An alternative solution will be proposed based on the treatment of QT in fiscal forecasts.

Tomasz Wieladek is the chief European economist at T. Rowe Price. Prior to this, Tomasz was employed by Barclays as a senior international economist. Tomasz also had a number of roles at the Bank of England, including MPC advisor and senior researcher. Tomasz is a CEPR research fellow. Tomasz earned an M.Phil. in economics from the University of Cambridge and a Ph.D. in international economics from the Graduate Institute of International and Development Studies. In 2023, he was awarded a Doctor of Science (ScD) from the University of Cambridge for this original contributions to macroeconomics and finance.

Jack Meaning is Barclays’ UK Chief Economist, responsible for devising and delivering the bank’s view on the macro outlook for the UK economy. He joined Barclays in 2023 from the Bank of England, where he spent seven years, three as the Economic Advisor to the BoE’s Chief Economist. He also led the team that designed and evaluated the Bank’s monetary policy tools. In 2022, Jack coauthored the now international, best-selling pop-econ book Can’t We Just Print More Money? Jack has published a number of academic papers and earned his PhD in Economics from the University of Kent, where he was awarded the prestigious ESRC scholarship. He is also a fellow of the Royal Society of Arts.

The event is being held at the offices of T Rowe Price, Warwick Court, 5 Paternoster Square, London EC4M 7DX  on Thursday 26 September 2024. The meeting will start at 5.30pm and be followed by a networking drinks reception. Registration from 5.00pm. Members can register via the SPE office.

We are grateful to T. Rowe Price for generously hosting this event.