BOE’s Vlieghe: Interest rates may stay at historically low levels for decades

Interest rates may stay at historically low levels for decades, the Bank of England (BOE) policymaker Gertjan Vlieghe said in a webinar on Monday, adding that he doesn’t see higher rates returning in his lifetime.

Key quotes

“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%.”

“Rates during the 1970s and 1980s were unusually high, so lower levels would better represent the average.”

“People living longer and building up savings as being one of the reasons for the shift.”

GBP/USD looks to 1.4100

Amid reflation trade and economy re-opening up from the coronavirus pandemic induced lockdowns, the pound remains the top performer across the fx space so far this week.

GBP/USD was last seen trading at 1.4081, adding 0.14% on the day, as the bulls look to recapture the 1.4100 threshold.