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frugalista

More Retirees = Pressure For Higher I Rs?

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Just a crazy thought.

In just a few weeks we will reach the date VJ day + nine months + 60 years. (the VE day equivalent is about now!)

Why is this important? Coz in 1945, shortly after VE/VJ day, many soldiers de-mobbed, came home and conceived many many children. These children will be turning 60 very soon. For quite a few (e.g. in the public sector), that means retirement. Retirement means buying annuities. Annuities are worth more if central bank interest rates are higher.

So, sooner or later a quite large section of the population will start to feel richer from *higher* interest rates rather than lower.

Could this pressure monetary policy commitees to raise rates?

frugalista

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Just a crazy thought.

In just a few weeks we will reach the date VJ day + nine months + 60 years. (the VE day equivalent is about now!)

Why is this important? Coz in 1945, shortly after VE/VJ day, many soldiers de-mobbed, came home and conceived many many children. These children will be turning 60 very soon. For quite a few (e.g. in the public sector), that means retirement. Retirement means buying annuities. Annuities are worth more if central bank interest rates are higher.

So, sooner or later a quite large section of the population will start to feel richer from *higher* interest rates rather than lower.

Could this pressure monetary policy commitees to raise rates?

frugalista

Nah, "My house is my pension" is the mantra.

Low interest rates are *good* for everyone according to the media, it's going to have to take one hell of an inflationary shock to change their attitude. (...cue the gold bugs :) )

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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