On 5 March 2009, the Chancellor authorised the MPC to use the APF for monetary policy purposes by financing asset purchases using central bank reserves. Therefore, in addition to setting Bank Rate each month, the MPC also sets a target for the level of assets to be financed by central bank reserves over a period of its choosing. In order to meet the MPC's objective for total asset purchases, the APF was authorised to purchase medium- and long-maturity conventional gilts in the secondary market.
The Bank's quantitative easing operations are set out in more detail in the Red Book:
Red Book - Chapter VIII - Quantitative Easing
In line with the MPC’s most recent decision in relation to the asset purchase programme, the APF will purchase a further £60bn of gilts over a six month period from August 2016, increasing the total stock of purchases to £435 billion. Purchases are funded by the creation of central bank reserves.
The Bank and the Debt Management Office (DMO) have agreed that the Bank will make available to the DMO a significant amount of the gilts purchased via the Asset Purchase Facility (APF) for on-lending to the market through the DMO’s normal repo market activity. For further details, please see the joint statement below.
Bank of England and DMO Statement
Details of the Forthcoming Operations