‘Building back better’ or sustaining the unsustainable? The climate impacts of Bank of England QE in the Covid-19 pandemic

Bailey, Daniel (2024) ‘Building back better’ or sustaining the unsustainable? The climate impacts of Bank of England QE in the Covid-19 pandemic. British Politics, 19 (1). pp. 134-153. ISSN 1746-918X

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Abstract

The environmental impacts of monetary policy received academic attention after the 2008 financial crisis and the ‘market neutral’ quantitative easing policies that followed. This article examines the Bank of England’s Corporate Covid Financing Facility (CCFF) and the Asset Purchasing Facility (APF) between June 2020 and June 2021 to assess whether the Bank’s response to the COVID-19 pandemic was aligned with the transition to sustainability. The data indicates that the Bank of England’s monetary allocation schemes again served as a panacea for businesses with ecologically intensive business models and a Treasury committed to restoring the pre-existing growth model. Indeed, the Bank’s QE schemes now represents an element of the crisis management governance that repeatedly ‘locks in’ the ecologically-calamitous economic trajectory at potential critical junctures. The Bank’s shielding of its technocratic and depoliticised status has thus far inhibited any leadership role in tackling the climate crisis, despite its growing power as an actor of economic governance at times of crisis and purported enthusiasm to ‘build back better’.