View more on these topics

Bank of England downplays low interest rate savings concerns

BankOfEngland Boe2450w

Bank of England monetary policy committee member Gertjan Vlieghe has hit back at criticism that low interest rates are hitting savers because most UK wealth is held in property rather than bank deposits.

Half of the UK household’s net wealth, which totals £10trn, is in property, Vlieghe said at Sheffield University on Monday evening.

Only £1.5trn was in deposits, while the remainder was in other financial assets.

The Bank of England cut already record-low interest rates to 0.25 per cent at its August meeting in response to the UK’s vote to leave the European Union.

Prime Minister Theresa May has previously said that low interest rates, alongside quantitative easing, comes with bad side effects – namely inequality.

Vlieghe said monetary policy was always redistributive.

But to say that some groups are affected differently by monetary policy than others is quite different from arguing that some groups suffer outright from monetary stimulus.

“Once the effect of an improved economy on savers is taken into account, it seems to me that most savers benefit from monetary stimulus.”

Vlieghe added that most savers are also employed and that low interest rates combined with asset purchases have helped lower unemployment by boosting nominal aggregate demand.


M&G to lift suspension on £4bn property fund

M&G Investments will reopen its £4.1bn Property Portfolio and feeder fund on 4 November after four months since its suspension. This makes the Aviva Investors Property Trust the only commercial property fund still suspended since the EU referendum. As part of their move, M&G will also remove the fair value adjustment applied on 1 July of […]

Nigeria cover image - thumbnail

White paper — Nigeria International Insights

Jelf Employee Benefits closely examines healthcare provision and challenges within Nigeria. This will be of particular interest to HR decision makers with employees based in Nigeria, and assesses the environment, risks, facilities and safeguards that are relevant to organisations that are actively deploying expatriate staff in this location.


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. What a nice way of saying “I am out of touch with most peoples reality – especially those retired”.

  2. Presumably Mr Vielghe can eat his house????

Leave a comment