- that simply creating money to finance government spending is inflationary
- the independence of the BoE would be compromised
- the same outcome could be done by conventional government borrowing, so PQE is a way to dodge persistent misunderstandings about the nature of government debt
In effect, the UK government debt is now £375 billion less than the declared amount (about £1.4 trillion) since that amount is "owed" to part of the public sector. Indeed, this is what the government states when it "consolidates" the accounts of the entire public sector, and the BoE actually returns interest payments it receives to the government so this portion of the debt has no cost. It can also be argued that, since the bonds that the BoE has bought represent past government deficits, historical deficit spending to the tune of £375 billion has effectively been funded by money creation at the BoE. So while QE was a monetary operation, it can be argued that it has a significant effect on fiscal policy.
One reason could be that normal government bonds (gilts) can be linked to non-investment spending such as paying a nurse, whereas the new national investment bank bonds are solely for investment spending, such as building a new hospital. This would help clarify the important distinction between these two types of spending.