Bailey On Excess Savings Dynamics; EU-UK Financial Equivalence

Q: On excess savings, can you say why this has been doubled to 10% from 5%?

• A (Bailey): It is a very unusual development. The increase in savings is concentrated in the parts of the population that have had supported incomes and much reduced chances to spend i.e. in the better off and the elderly.
• A (Broadbent): Don't think about this as the only influence on consumption. The effect of lockdown is to raise the rate of saving. Much of the consumption growth comes from a slowdown in that rate, not necessarily running down the stock.

Q: A few weeks ago you made it known that officials on the EU side were putting pressure on UK firms to move staff out of the UK that made your job a lot harder. What is the latest in that conflict you have?

• A (Bailey): I made a point that one has to make a distinction between equivalence and locational policy. It is not in the interests of financial markets or financial stability to move away from safe open markets. It is important that we don't move away from that.