Seneca IM's Elston: BoE cannot boost economic growth alone

Government should step in

Peter Elston, CIO at Seneca Investment Managers, has said the British government should buy UK equities to help the Bank of England boost the economy.

He said the government should buy UK equities because the asset class would offer higher returns than long-dated bonds. Referring to the Treasury's recent sale of 0.125% 50-year inflation-linked gilts worth £2.5bn for £5.1bn, Elston suggested the government put aside £0.2bn worth of interest and then use the money to buy UK equities as it would only need to make a return on investment of at least -1.4% to repay the £2.5bn par value. He said: "The British government has this wonderful opportunity to borrow money and do some interesting things with it such as investing in the equity mar...