Lord Skidelsky proposes UK national investment bank
Robert Skidelsky, the economic historian, took to the bully pulpit at the National Association of Pension Funds' investment conference on Wednesday afternoon and proposed a way to help pull the UK economy out of its slump. The UK government should consider setting up a national investment bank - similiar to the European Investment Bank - to boost economic growth across the country, he said.
Lord Skidelsky suggested that such an institution would encourage investment in infrastructure and stimulate the wider UK economy if it were established. Pension funds looking to match liabilities would be enthusiastic buyers of the debt the bank might issue, he said. "Loans could be made that would attract the interest of pension funds by guaranteeing the returns of long-dated index-linked gilts," he told the audience.
In his speech to the hundreds of pensions professionals gathered here in Edinburgh, Lord Skidelsky also lashed out at the government's economic reforms, describing them as ineffective and arguing that the UK economy remains at risk of spiralling into deflation.
Demand for goods and services from consumers and businesses is too weak to create a surge in inflation, according to Lord Skidelsky. The UK is also hampered by its reliance on exports to continental Europe and the US, which are also "mired" in "mediocre" economic recoveries.
"Consumer confidence and business confidence have not come back in the UK. ... Unemployment is rising," he said. " None of these trends points to a very fast recovery."
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