BoE’s Vlieghe Doesn’t See 5% Interest Rate in His Lifetime

Gertjan Vlieghe, a member of the Bank of England’s (BoE) Monetary Policy Committee, said on Monday that he expects interest rates in the United Kingdom to remain low and not return to their levels prior to the global financial crisis in the foreseeable future.

Vlieghe, who is 49 years old, noted that a return to the 5% interest rate in Britain is probably not going to happen in his lifetime.

“We’re going through one of these very long-term, low-interest rates periods again.”

“It’s going to be with us for another decade, maybe another two. It doesn’t mean interest rates don’t go up from current levels. It just means that when they go up, they don’t go back to 4% or 5%.”

“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.”

“I think one of the really big drivers of that is demographics.”