Rates may fall to 2% to prevent Japan-style nightmare

Speaking about lessons the West can learn from Japan’s decade of stagnation following its financial crisis in the early 1990s, Drayson says countries like the US and UK are well placed to avoid many of the mistakes made by Japanese policymakers. Following a huge credit bubble and financial crisis, the Japanese were slow to react, Drayson says, and the country suffered more than a decade of deflation and economic stagnation from which it has only recently recovered. Some are worried the rapid fall in house prices and other assets may lead to a deflationary environment in the West, which wi...