Ultra-low Bank of England interest rates have taken a toll on productivity - BoE's Haldane

Bank of England chief economist Andy Haldane, said ultra-low Bank of England interest rates since the financial crisis have probably taken a modest toll on productivity but were a price worth paying to avoid higher unemployment, in a lecture to be given at the London School of Economics. 

Key quotes (via Reuters)

  • 'total factor productivity', had shown its longest stagnation in more than 200 years
  • Low interest rates had probably played a role, by keeping some heavily indebted, unproductive 'zombie' businesses alive
  • Interest rates at 4.25 percent would have imposed a "very significant macroeconomic cost" in terms of more people out of work
  • Options other than higher rates offered a better way to boost productivity
  • What would be in it for frontier companies? A more productive supply chain is clearly in their interests

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