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Quantitative Tightening

Geoff Riley

16th May 2026

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Quantitative Tightening (QT) is a contractionary monetary policy used by the Bank of England (BoE) to shrink its balance sheet and reduce the money supply, reversing Quantitative Easing (QE).

Under QE, peak assets reached £894.9 billion , which has dropped to a current asset stock of £524.9 billion, while the base interest rate sits at 3.75%. The Monetary Policy Committee utilizes passive QT by letting gilts mature and active QT by selling bonds to institutional investors.

Pursued since late 2022, QT controls second-round inflationary effects and restores capacity for future emergency QE.

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Geoff Riley

Geoff Riley FRSA has been teaching Economics for nearly forty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD and Revision conferences in the UK and overseas.

@tutor2uGeoff

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