Charlie Bean insists easy money is here to stay for years to come

Tim Wallace
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TOP BANK of England officials this weekend insisted firms should have the confidence to borrow because rates will stay at rock bottom for years, despite market scepticism.

Deputy governor Charlie Bean said he wants to send a “clear signal” rates will not rise in the near future despite the improving economy.

“What we’re trying to do is explain as clearly as we can, what are the factors that will guide policy going forward,” he told Bloomberg at the Jackson Hole conference of central bankers. “We have had a string of generally upbeat data in the last few months. We’re looking at growth which will be getting back to historical averages as we go through into the second half of this year.”

The Bank gave forward guidance earlier this month to indicate it would only consider raising interest rates when unemployment drops below seven per cent, which it expects to happen in 2016.

But sceptics believe the recovery means enough jobs could be created to hit that threshold in 2015.

“The potency of dovish forward guidance has been diminished because markets are not convinced this rhetoric would be followed by policy action, said RBS economist Richard Barwell.