Standard Life.com – U.K. – Standard Life Investments, the global asset manager, assesses the outlook for long-term interest rates, in the light of some worrying structural trends which were amplified by the result of the UK’s referendum on EU membership.

Jeremy Lawson, Chief Economist, shares his opinion in the latest edition of Global Outlook that governments need to embrace fiscal spending and structural reform, as well as a further round of monetary loosening, if the global economy is to move out of a prolonged period of subdued growth, inflation and interest rates.

Jeremy commented “Easy monetary conditions have been successful in limiting stress in financial markets, but not sufficient to trigger an increase in private investment or persuade governments to launch large-scale infrastructure investment programmes. Our view is that investors are yet to be convinced that growth and inflation will move significantly higher, or that markets and economies have become any less dependent on low interest rates.”

Jeremy summarised the situation “What the world needs is a coordinated loosening of fiscal and monetary policy amid widespread structural reforms designed to return productivity growth to historic norms. Economists have been recommending such action for some time but governments have yet to receive the message. We can only hope that global growth does not decelerate much further before political pressures force policymakers to listen.”