IoD chair says time is right for rate rise

THE Institute of Directors’ first ever woman national chair is calling for a rise in interest rates to prevent the escalation of a property boom and to help pension funds.

Lady Barbara Judge, who took up the three-year office in May, was speaking after stopping in Manchester during a tour of the UK regions.

The New Yorker, who has spent the last 22 years in the UK, is also chair of the Pension Fund and has thrown her weight behind a gradual rise in interest rates from the current 0.5% level.

“Interest rates need to go up, probably to 3% or 4%,” she said. “We’ve been stuck at an historical low for some time now, and they need to start rising.

“Firstly, this is because it might stop the property boom that is making it so hard for young people to buy houses.

“It might also deter foreigners coming in and buying all the properties, particularly round London. I want prices to stabilise, so young people can get on the property ladder.

“The second reason they need to rise is because of pensions..  One of the reasons that pension deficits are so high is because interest rates are so low.

“Pensions are historically invested in safe securities, gilts or government institutions or debt instruments.

“With the interest rates so low, it means the value of these existing portfolios are down and the deficits  have gone up.

“If interest rates go up that means the value of the portfolios would go up and pension deficits will go down. So  I believe 3 to 4% is right and that we’ve been waiting long enough.”

Judge also said she was dedicated to widening the scope of the IoD to encourage more women to join the organisation, as well as forging links between young entrepreneurs and older mature talented professionals who may have retired prematurely, who she said still have much to contribute in business.

She said: “Women have always been allowed to be members – not like some gentlemen’s clubs – but historically there haven’t been very many of them.

“Maybe that’s because most businesses were mostly run by men. But many businesses today are run by women.”

Judge also wants a more inclusive approach for young entrepreneurs and start-ups.

“Historically, people didn’t join the IoD until they were directors,” she said. “But I want to open the doors to young people to get people to come in and start their businesses. I want it to feel like it’s a place for entrepreneurs, creativity and camaraderie and make them at home.

“Thirdly, there are the older people, mature people who are retired but don’t want to be. Today we can all live till 90 and retire at 65. But how much golf can you play? So want to utilise the talents of these mature business experienced people to help the young ones.”

Judge also backed plans for city devolution and elected mayors.

“I think the concept of locally elected mayors. I come from New York where we have had locally elected mayors my whole life. Good ones can transform the city and they are closer to the population. They can make a real difference by helping the schools, transport, and infrastructure. So I believe in the Northern Powerhouse.”

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