QE doesn’t stimulate the economy because bonds and reserves are functionally identical as far as bank capital requirements are concerned and reducing interest rate payments is deflationary.
It does make it a lot easier. The US, for example, was issuing stimulus cheques because there was no way to directly transfer funds into bank accounts. The UK had the same problem, so they pushed their stimulus through employers. In both cases there was no direct pipe from the central bank to the intended recipient which is what I think is most of what BoE is trying to achieve.
QE was the equivalent of using a waterfall to put out a candle. If you squint hard enough and get drunk on supply-side wonk-juice you could convince yourself it worked.
The UK doesn't have the same problem. Our payments are entirely electronic, and there is a direct pipe from HM Treasury to every person with a Sterling bank account. The choice to run the furlough scheme via PAYE was political, not technological.
Our electronic transfer system is sufficiently sophisticated that the government can operate on a commercial bank account and have the money automatically transferred from a Contra account at the Bank of England.
The UK has some of the finest electronic banking facilities in the world.
Do you have a source for this? It seems crazy to me because in Australia almost everyone just got stimulus payments deposited the same as any other government transfer payment or tax return and we don’t all have accounts at the RBA
Actually reserves are slightly better!