BOE’s Dale Says Savers Benefited From QE, Interest-Rate Cuts

Bank of England Chief Economist Spencer Dale said U.K. savers have benefited from the reduction in the benchmark interest rate to a record low and the central bank’s bond-buying program because those measures prevented a deeper economic collapse.

The stimulus also stopped asset prices from falling as much as they otherwise would have during the recession, protecting the value of savings and wealth invested in financial assets, Dale said in an article in The Sunday Telegraph, published in London today.

Describing some commentary on the impact of quantitative easing on pensions as “misleading,” he said gains in the value of assets held in pension funds have offset lower annuity rates.

Dale’s article comes days after the Bank of England published a paper defending QE against criticism that it hurt savers, saying these costs must be weighed against the economic benefits. The report was a response to a government request that the central bank explain the impact of its bond purchases.

“Our economy today would be in a far worse state without QE and a bank rate at 0.5 percent,” Dale said. “The recession would have been even deeper, the rise in unemployment even greater.”

The U.K. is “still laboring under the effects of the financial crisis,” he said. The task of monetary policy is to stimulate the economy to return it to a state of stable growth, low inflation and a “more normal level of interest rates.”

To contact the reporter on this story: Brian Swint in London at

To contact the editor responsible for this story: Will Kennedy at

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