What effect
has quantitative easing had on pension deficits of large UK companies? A recent study has suggested that the
final-salary pension shortfall of the top 350 companies in the UK has
quadrupled over the past year from £20 billion to £80 billion. The authors of the report suggest that this
increase is largely due to falling gilt yields, arising from the fact that the
Bank of England has bought a third of the gilt market through quantitative
easing. But this report ignores the
impact of quantitative easing on equities and other real assets held by pension
funds. As highlighted in an earlier
post, quantitative easing may have helped sustain returns on real assets.
Michael Aldous and I had our book The CEO: The Rise and Fall of Britain's Captains of Industry published a few weeks ago. You can find out more about it and buy it at Cambridge University Press's website . It is also available at Amazon , Waterstones , and Barnes & Noble . The CEO has already been reviewed in The Sunday Times , The Observer and Financial Times .