What determines r*? Fundamentally, the balance of saving and investment demands does so. A very clear systematic exposition of the theory of r* is presented in a 2015 paper from the Council of Economic Advisers. Several trends have been cited as possible factors contributing to a decline in the long-run equilibrium real rate. One a priori likely factor is persistent weakness in aggregate demand.
It is worth noting, incidentally, that the recently re-elected Government has once again committed, as have I, to this framework, which will continue to guide our decisions. My colleagues and I are here to respond to your questions. BIS Review 156/2010  3