BoE says spend not save

THE deputy governor of the Bank of England called for Britain’s 22m savers to eat into their reserves and spend more to help stimulate the economy yesterday.

Charlie Bean said the BoE wanted households to spend more rather than save. Bean’s comments come as British savers suffer poor returns on their deposits following the Bank’s intervention in the financial crisis which have brought interest rates to their lowest level in history.

Bean said this was part of an “aggressive policy” designed to deal with a “once-in-a-century” financial crisis.

In an interview with Channel 4 News Bean added that while savers might be suffering now “there will be times in the future as there have been times in the past when they will be doing very well out of the fact that interest rates are at a relatively high level.”

The deputy governor added it was Bank policy to “encourage more spending” although he admitted the BoE would prefer to see that in the form of more business spending.