Q1 Jesse Norman: Thank you, Dr Altmann and Mr Rose, for your focus on both short-term and long-term rates. Of course, if you want a positive yield curve, then short-term rates will have to be anchored at low rates while long-term yields are allowed to drift up. Dr Altmann, in your comment you said that gilt yields would rise if QE was not continued or was going to be unwound. Does that mean that you think that gilt yields are not just a function of an international or national judgment on economic activity; there are lots of specific reasons why long-term gilt yields are the level they are?
Dr Altmann: Yes. I think gilt yields have been artificially distorted and the long rate has been artificially depressed by the Bank of England buying about a third of the market. It does not take much economic modelling to suggest that if you buy a third of the market of an asset you are going to distort its price.
Q2 Jesse Norman: So it is not simply a judgment about the Government’s policy or economic prospects of the country? There are specific reasons why those yields are low?