"Lower consumer price inflation benefits the poorest, because consumer inflation hurts the poor most."
The Bank governor said higher consumer price inflation hurts the poorest most, and as QE prevented this happening, it benefited lower earners.
But David Scott, an adviser at the firm of Andrews Gwynne in Leeds, using the example of US data, from which he draws a comparison to the UK, said net worth has fallen for every group except the wealthiest 10 per cent of the population since the introduction of QE.
Mr Scott said: “In simple terms, investors reside in a world of no wage increases - or eroding pricing power of labour and products - and the need to keep ‘zombie' companies alive to avoid contraction of demand.
"These forces are highly deflationary.
"Interest rates on the United States’ ten-year Treasury bond recently hit 3 per cent, which should be regarded as historically low.
"Instead, a decade after the financial crisis began, it’s remarkable for being that high, and economic and financial experts can’t agree on whether this new rate portends a brewing economic miracle or a looming economic crisis.”
He said he expects the looming interest rate increases in the US to trigger a global credit crunch similar to the events of 2007, because the economic growth achieved since then has been achieved on the back of lower rates.
Though addressing the issue of so-called zombie companies - kept alive only by record low borrowing costs - at the select committee hearing today Mr Carney said the evidence indicates the phenomenon in the UK is a myth.
David.Thorpe@ft.com
