The impact of artificially supressed government bond yields – 23 November 2020

On 21 May 2021 the AER published a draft working paper on Rate of return and cashflows in a low interest rate environment. The draft working paper begins our considerations on:

• whether we are in a low interest rate environment;
• if we are, what the consequences are of lower interest rates; and
• does this suggest that there is something that needs to be addressed?

The draft paper also considers evidence in two consultant reports by NERA and Frontier Economics submitted to the AER in prior processes by stakeholders.