BOE Should Hold Off Expanding QE Plan, U.K. Pension Group Says
The Bank of England shouldn’t expand its bond-purchase program again because it is “damaging” pensions and may be doing little to stimulate economic growth, said Ros Altmann, director-general of retirement advisory group SAGA.
“Given that we are in a double dip recession, bank lending is falling and lending rates have been rising, it is far from clear that quantitative easing is the right policy to get the economy going,” Altmann said in an e-mailed statement today. “Given the damage it is doing to pensions, I would urge caution and careful consideration with a balanced analysis of how the policy works.”
Altmann, a former U.K. Treasury adviser, said “distorting the gilt market is dangerous, it undermines our pension system and has side-effects that actually damage growth.”
“This policy may seem to make sense in academic models, but in the real world, with our ageing population and pension system that is underpinned by gilt yields, QE simply may not work,” she said.
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