Interest Rates: Put them Up Now

Let us hope that this time the MPC will at last do what it should have done years, literally, ago, and move interest rates upwards. It has got nothing to do with slightly better growth, 0.4 is little more than flat lining in the big scheme of things, it has to do with the exploding debt levels in households which are now becoming a real and present danger to economic stability. Throw in uncertainty about Brexit and a politically volatile climate, and you have all you need for a great big crash.

Edging up interest rates will restore them to their proper function of an active tool in economic management and act as a warning. It will at last deliver some prospect of people getting a return on their savings, which will begin to reshape the economy away from its addiction to borrowing funding asset inflation and back to saving funding wealth creation.

There is one cardinal rule of low interest rates. They do not make mortgages cheaper. They just make them bigger.