Top official says raising the retirement age could help the Bank of England fight the next recession
Raising the retirement age could help the Bank of England cope with the next recession, one top official said.
Gertjan Vlieghe, a member of the Monetary Policy Committee (MPC), said people are saving more as they approach retirement, which lowers borrowing costs in financial markets.
Pot luck: People are saving more as they approach retirement, which lowers borrowing costs in financial markets – making it harder for the bank to stimulate the economy in the event of a slowdown
This makes it more difficult for the Bank to stimulate the economy in the event of a slowdown, as interest rate cuts have less effect.
In his closing speech as an MPC member, Vlieghe argued for ‘reducing retirement time’.
He added: ‘Many countries, including the UK, are slowly raising their retirement age, but it is by no means keeping up with the increase in life expectancy.’
He said not all jobs can be done by older workers, adding: “You should at least consider removing policies that force employees to retire before they want to.”