Cazenove Capital's Jeffrey: Permanently low rates may be the problem, not the solution

In the immediate aftermath of the last recession and accompanying financial crisis, there was every reason to expect companies to be reticent about embarking on long-term, productivity-enhancing investment programmes.

Moving the story on, we are now seven years from the end of the recession, and it remains the case that productivity growth in the larger Western economies remains very weak.  The corollary of this, which can be seen very clearly in the US, Germany and the UK, is that the rate of job creation accompanying relatively dull growth has been exceptional. In turn, this has seemingly created a policy dilemma for the US Federal Reserve and for the Bank of England (less so for the European Central Bank, which is more focused on deeper problems in Southern eurozone economies) - should the direc...