Jon Cunliffe: Why are interest rates low?

Speech by Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, at Manchester University, Manchester, 16 November 2016.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I left this University almost exactly 40 years ago and, armed with a Masters in English Literature, ventured out into the wider world.

There was no great expectation of making one's fortune. It was a very different world. I had no interest whatsoever in economics. But even I knew the economy was in pretty bad shape, following the oil crisis, the three day week and the recessions of the previous two years.

Even my younger, 1976, self, knew that inflation was running at 15%. To be honest that seemed pretty normal - it had been above 15% for three years. I didn't realise then that I actually had inflation expectations but had someone asked I guess mine would have been pretty high.