Industry Expert Says Consumer Spending Will Rescue The Economy

Charles Bean, the Bank Of England Deputy Governor has admitted that interest rates are being kept low to discourage savers and get people to start spending in order to kick-start economy. However, the Deputy Governor will face a tough task to reverse the recent trend which has seen consumers prioritising debt repayment over extending their borrowing.

The deputy Governor highlighted that savers are not benefiting from lower interests rates, while the opposite was apparent for borrowers, he said “I think it needs to be said that savers shouldn't necessarily expect to be able to live just off their income in times when interest rates are low. It may make sense for them to eat into their capital a bit.” In an almost direct sales pitch for the retail sector when asked how long interests rates would stay this low he remarked “I would certainly not expect the level of bank rates to stay very close to zero for a decade or more”.

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