LONDON (Reuters) – Bank of England policymaker Gertjan Vlieghe said on Monday that he did not expect British interest rates to return to levels common before the 2008 financial crisis during his lifetime, due to long-term demographic pressures.
Vlieghe, 49, said that increasing life expectancy and longer periods of retirement had boosted demand for assets, pushing down long-run interest rates in most Western economies, including Britain.
Asked by students at Durham University when interest rates might return to the level of around 5% common before the financial crisis, Vlieghe replied: “Maybe not in my lifetime.”
“Actually if you look at very long run data on interest rates, it’s the 1970s and 1980s that were unusual decades. Interest rates were unusually high then,” he added.
(Reporting by David Milliken; Editing by Chizu Nomiyama)
