Quantitative easing, introduced by central banks worldwide in the wake of the financial crisis, has reduced the level of wealth inequality in the UK, according to the Bank of England.
A research paper, written by Phillip Bunn, a senior economist at the Bank, and researchers Alice Pugh and Chris Yeates, said the Gini coefficient, a measure of wealth inequality widely used by economists, shows wealth inequality in the UK has been falling or flat since 2010.
Wealth inequality examines the disparity between the level of assets owned by people in the economy, rather than the level of income earned.
The Bank of England paper asserts that while quantitative easing, an instrument of monetary policy widely used by global central banks since the financial crisis, has pushed up house prices, which means homeowners have become wealthier relative to non-homeowners.
In 2012 the Bank of England published a report saying the policy of quantitative easing disproportionately benefits the better off.
But in this latest paper Bank said the value of pension pots was lower than otherwise have been as a result of quantitative easing. This is because QE pushes down the income earned by the bonds and equities in pension pots.
The central bank believes that because more people are home owners than have other financial assets, the net impact is that the QE policy has contributed to a reduction in wealth inequality.
The researchers said every age group has benefitted in wealth terms from the policy of QE, relative to if it had not pursued the policy.
A previous report by the same authors stated the young gained more than the old from QE because the policy prevented a deeper recession, which helped wages and employment levels rise.
Among those to have criticised the policy of quantitative easing - introduced by Labour's Gordon Brown in the wake of a global financial crisis to stave off economic depression - and its impact on the wider economy is Prime Minister Theresa May.
She told the Conservative Party conference in October 2016 that “while monetary policy – with super-low interest rates and quantitative easing – provided the necessary emergency medicine after the financial crash, we have to acknowledge there have been some bad side effects”.
She added: “People with assets have got richer. People without them have suffered. People with mortgages have found their debts cheaper. People with savings have found themselves poorer.”
Fund managers and financial advisers have also contradicted the idea QE has helped the poor.
Paul Flood, a fund manager at BNY Mellon said the policy of quantitative easing has contributed to much of the “social unrest” witnessed in the UK due to the inequality it injects into the system.
David Scott, an adviser at the firm of Andrews Gwynne in Leeds said the Bank of England working paper is “a load of nonsense".
He said: “Equities and property, are largely owned by the top 10 per cent. The young have neither and cannot even get on the housing ladder because of these mad cap policies.