Press release

Bank must take 'long hard look' at dangers on high inflation on growth

Tuesday 28 June 2011

  •  Keeping rates low may not be best thing for growth says Saga Director General

As The Bank of England’s Governor faces fresh questions today on the Bank's latest quarterly Inflation Report, Dr Ros Altmann, Director General of Saga, comments on both the Banks continued contribution to spiralling inflation and today's publication of Office for National Statistics final figures for UK economic growth:

“We are seriously concerned about the crippling effect the current high levels of inflation are having on consumers and their confidence. It appears that the negative impacts of inflation are being overlooked. Authorities remain complacent and do not seem to have taken sufficient account of the toxic impact these high levels of inflation are having on growth.

“High inflation could, in fact, be a worse outcome for growth than low interest rates because of the effect it has on consumer confidence. We know from our research that people in their 50s are seriously concerned about the rising cost of living. Anyone on fixed incomes, when prices rise at this rate, can afford to buy less and less.

“It is essential for the Bank to take a long hard look at the dangerous impact this double whammy of high inflation and low interest rates is having on the UK economy, rather than exclusively focusing on the presumed benefits of keeping rock bottom rates unchanged. Confidence is key to the consumer.”


For further information please contact the Saga Press Office on 01303 772499.