Skip to content

OECD calls for low interest rates

The Organisation for Economic Co-operation and Development (OECD) has warned that Britain must keep interest rates low to maintain its recovery - even if that means high inflation.

The influential think-tank again praised the coalition's drive to tackle the deficit, saying tough measures were "vital" in the wake of the credit crunch.

However, it said there were "significant headwinds" for UK plc as spending cuts bite and global trade remains in the doldrums.

The assessment, in the OECD's latest UK Economic Survey, comes despite calls for the Bank of England to increase interest rates to bring inflation back to the government's 2 per cent target.

"The UK economy emerged from the 2008-09 recession with elevated public and private debt and high unemployment," the report said. "Strong growth and macroeconomic stability in the run-up to the crisis had hidden a build-up of significant imbalances, influenced by overreliance on debt-finance and the financial sector, and booming asset prices.

"These imbalances need to be addressed to ensure a sustainable and balanced recovery. The government is pursuing a necessary and wide ranging programme of fiscal consolidation and structural reforms aimed at achieving stronger growth and a rebalancing of the economy over time."

Copyright © Press Association 2011

'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Syscap Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

Click for more information about the Wesleyan group of companies.

© 2016 Wesleyan Assurance Society