Newspaper article The Evening Standard (London, England)

Interest Rates Should Be at 6% in Recovery, Says Mayor's Economist

Newspaper article The Evening Standard (London, England)

Interest Rates Should Be at 6% in Recovery, Says Mayor's Economist

Article excerpt

Byline: Joseph Watts Political Correspondent

BORIS JOHNSON'S top economic adviser has said homeowners should eventually be hit with interest rates 10 times higher than current levels.

Chief economic adviser Gerard Lyons said rates should increase to five or six per cent as the economy recovers. They are currently at 0.5 per cent.

The remark was seized upon by Labour who said it showed the Mayor's team was "out of touch".

Former Standard Chartered chief economist Dr Lyons is highly respected and in August 2008 was one of only two UK economists predicting the impending financial crash.

Speaking at the London Assembly economics committee he said: "Where I would disagree with the Governor of the Bank of England [Mark Carney] is that he says 'rates stay low, rates go up gradually, rates peak at a low level'.

"I would actually agree with the first two of those stay low, go up gradually [but] I think the level which UK interest rates need to eventually peak should be high, not low. …

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