The mooted relative price change between capital and labour would reinforce that tendency by changing the incentives between work and retirement, in the direction of it being more rewarding to make the adjustment partly in the form of a longer working life, rather than entirely in the form of higher saving.
The annual rate of change of loans to non-financial corporations (adjusted for loan sales and securitisation) remained negative at –2.3% in June, compared with –2.5% in May and –3.2% in February. Lending to non-financial corporations continues to be weak, reflecting the lagged relationship with the business cycle, credit risk, credit supply factors and the ongoing adjustment of financial and non-financial sector balance sheets.