Long-term ultra-low interest rates haven't increased inequality in the UK, the Bank of England's deputy governor said, rejecting claims that the strategy damaged some people.

Ben Broadbent reiterated the Bank's previous message that it will tread carefully in setting interest rates in the coming months as it balances keeping inflation in control and helping the economy after the Brexit decision.

Theresa May said earlier this year that low interest rates and quantitative easing had "negative side-effects"

Broadbent used his lecture to explain why low rates hadn't increased income disparity, given that most income came from salaries and not assets. Loose monetary policy had no influence on asset inequality, he argued.

"In the UK, summary measures of income inequality, especially the Gini coefficient, have stayed basically stable since real interest rates began to decrease a quarter century ago," Broadbent stated at the Society of Business Economists' annual meeting.

The real price of shares, which are held by affluent households, is no higher than it was 20 years ago or before the financial crisis.

Turning to the housing market, he found house values, which account for a higher part of household wealth, "performed better" over two decades. Real housing prices aren't higher than a decade ago. “Whatever measure you use, wealth distribution has been flat throughout that period,” he remarked.

Broadbent determined the monetary policy committee (MPC), on which he sits, wasn't affecting inequality.

“I doubt that any independent decision of monetary authority, including the MPC, has any impact on long-term real asset prices or distributional consequences,” he said.

"The only justification for discussing these questions is the evident concern that looser monetary policy, in particular, is having meaningful and persistent repercussions on income and wealth distributions. The evidence doesn't support that."
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Broadbent addressed the pound's drop after June's Brexit vote. After official numbers revealed large increases in manufacturers' costs and prices, Broadbent noted the weakened pound's expected influence on inflation.

Referring to sterling's collapse, he added, "This is expected to push up import prices and, because 30% of consumption is imported, consumer prices as well."

Broadbent warned that hiking interest rates to combat inflation could increase unemployment. The MPC shouldn't do this.”

In its previous set of economic forecasts, the MPC said it would leave policy on hold for some time, with interest rates at a record low of 0.25 percent.

Broadbent: "We can endure high inflation because the alternative is higher unemployment and slower wage growth." We expect to accept these things (to some extent) to keep inflation below target. That's the trade-off monetary policy sometimes faces.