A new era of financial repression

Financial repression – defined in the current context as measures that artificially lower the cost of government borrowing – will become an increasingly used tool to cope with higher public sector debt burdens post COVID-19. After all, it is more politically palatable than many of the alternative ways of managing debt, such as austerity. But it will further squeeze returns for savers and could also promote financial excess and hamper the long-term efficiency of economies.