A Matter of No Small Interest: Real Short-term Interest Rates and Inflation since the 1990s - Speech by Marian Bell

In a speech this evening to The Institute of Directors and Milton Keynes Chamber of Commerce at Cranfield University, Marian Bell, a member of the Bank of England's Monetary Policy Committee, discusses how in recent years persistently low inflation and steady growth in nominal demand has been accompanied by historically low short-term interest rates, both in the UK and other major industrialised economies.
Published on 02 March 2005

Ms Bell notes that one explanation for persistently low short-term interest rates in the major economies is low inflation itself. The lower inflation, the lower nominal interest rates can be for a given real return. But this does not seem to explain the whole story as even adjusting for inflation, 'real' short-term interest rates have been low.

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