Lords Economic Affairs Committee report on QE out overnight

Just a quick note that the Lord Economic Affairs Committee's report on QE was published overnight with the title "Quantitative easing: a dangerous addiction?" - which gives away the punchline of the tone of the report.

• The EAC's inquiry states that there is not enough scrutiny of QE including in parliament and notes that credibility of the Bank could worsen and "harm its ability to control inflation and maintain financial stability" if "perceptions continue to grow that the Bank is using QE mainly to finance the Government's spending priorities".
• The full report is available here.
• Note that our policy team conducted an exclusive interview with Lord Bridges, which was also published overnight and is available here.
• This could be seen as a bit of government overreach as it on the one hand seems to be challenging the BoE's policies. However, on the other hand, it seems to be critical of the Bank for its policies appearing to monetise debt.
• Any further developments on this will be watched by the market, but are much less important than the comments from Saunders, Ramsden and Cunliffe over the past few days.
• Gilts have opened higher this morning, but some way off of yesterday's highs.
• We continue to focus on gilt 5s30s which fell to their flattest level since August 2020 yesterday.