In news that may seem bizarre to some savers, the Bank of England’s deputy governor recently extolled the virtues of spending rather than voicing complaints about the currently historically low interest rates across the country.
During a recent interview conducted by Channel 4 News, deputy governor Charlie Bean told Faisal Islam, the news station’s economics editor, that the Bank of England wants to see more spending occurring in the short term to boost the economy, despite low interest rates eating away at the majority of savings account incomes.
Deputy governor Bean made the suggestion that older savers, many of whom have come to depend on the income they generate from high interest savings accounts in order to cover the costs of the ever rising standard of living in the UK, could take solace in the fact that the boom years prior to the economic downturn may have resulted in a capital gain on their homes despite the fact that record low rates, in conjunction with an above-target inflation rate, is quickly eating away that equity.
Mr Bean summed up his position during the interview with Mr Islam by stating that today’s suffering savers should bear in mind that, as there have been past instances where high interest rates have led to higher corresponding savings income, there is no preclusion to the possibility that those boom times will return sometime in the coming months and years.
Industry experts have been sceptical of the Bank of England’s policies as a whole for some time now, especially since the current interest rate set by the regulatory authority has been holding steady at the historically low rate of 0.5 per cent for over 18 months straight, something that the BoE’s Monetary Policy Committee has been nearly unanimous in maintaining; only policymaker Andrew Sentance has consistently been voting for a raise in rates for several months, in an effort to stave off inflation.