Former BOE Policymaker Expects Rates to Settle at Just Above 4%
- Charles Goodhart, founding MPC member, says disinflation over
- Ageing populations, high debt burdens and demography the cause
The bank of England in London.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
UK interest rates are likely to settle at just above 4% over the longer term as deglobalization and the end of China’s demographic boom put upward pressure on inflation, according to Charles Goodhart, a founding member of the Bank of England’s Monetary Policy Committee.
With major central banks cutting rates, attention is shifting to the “neutral” level at which they neither simulate nor restrict growth. Andrew Bailey, the BOE governor, told the Kent Messenger newspaper last month he “would not expect” a return to the “very low interest rates” seen after the 2008 financial crisis but could not say where they will settle “with any great accuracy.”