Charlie Bean expects natural rate to change course
Demographics likely to underlie shift, former BoE deputy says
The natural rate of interest in the UK is likely to gradually reverse a downward slide that has been going on for decades, former Bank of England (BoE) deputy governor Charlie Bean said today (September 25).
Addressing a conference in London, Bean said he expected "some recovery" of the natural rate – the hypothetical rate of interest that holds when GDP and inflation are on trend – although it may not return to levels last seen during the 1990s, and it "may take a while".
The downward movement
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