Ageing population could harm policy transmission – BoE’s Saunders
Interest rates’ “cashflow channel” may weaken, says MPC member
The UK’s ageing population could start to hamper the pass-through of monetary policy, the Bank of England’s Michael Saunders said in remarks on November 22.
An important part of policy transmission comes from “cashflow effects”, as changing interest payments affect how much households can spend, the monetary policy committee (MPC) member said. Young people tend to have higher debts relative to income, making them sensitive to rate changes, while older people have higher savings. “People with
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