Sir Meryvn King also suggested that growing household savings rates are one reason for Britain’s recent poor economic performance.
He also warned that the UK economy is set to “zig-zag” between growth and contraction this year, partly because of an additional bank holiday for the Diamond Jubilee.
The Governor was speaking amid growing public and political unease about the impact of the Bank’s emergency measures – pumping £325 billion of new money into the economy and Bank rate at a historic low – on savers and pensioners.
Those policies have cut the returns on savings and annuities to record lows. Saga, a campaign group, estimates that more than 1 million pensioners have retired with permanently lower retirement incomes because of the impact of the Bank’s quantitative easing programme.
Savers have also been hit by high inflation, though the bank predicted that inflation will fall back to 1.8 per cent by the end of 2014, easing the recent squeeze on household budgets.
Sir Mervyn insisted he understood the problems facing savers, but made clear he believes he can do nothing to help. » | James Kirkup, Deputy Political Editor | Wednesday February 15, 2012
