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territory , anyone brave enough to have bought in at the bottom would have ended the year sitting on gains of around 60 per cent . Performance has been strong , but what is driving it ?
Intervention breaks unprecedented records Few if any analysts would claim that markets haven ’ t been distorted by QE . Yet stimulus packages are nothing new . There has been more than a decade of central bank intervention following the financial crisis .
Despite the economic havoc wreaked by the Covid-19 pandemic , equity markets did well in 2020
But today ’ s levels may require the definition of unprecedented to be redrafted . The Bank of England doubled QE levels last year in a bid to steady the ship . In the US , the Federal Reserve ’ s balance sheet was around 6 per cent of GDP before the financial crisis , rising to 15 per cent as it sought to
£ 900bn £ 800bn £ 700bn £ 600bn £ 500bn
BANK OF ENGLAND PURCHASES OF BONDS
£ 645bn
£ 745bn
£ 895bn
£ 400bn £ 300bn
£ 375bn
£ 445bn
£ 200bn £ 100bn
£ 0bn
£ 200bn
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Source : The Bank of England trustnet . com