Interest Rates to remain at historical low levels-Why?
The new Governor of the BofE has signified that interest rates are going to remain at very low levels for some considerable time – Why?
Recent weeks have seen a stream of positive economic indicators. Industrial production; The Service sector and Exports. This week furthe positive indicators including car sales and property.
This has to be the real concern. Every housebuilder is reporting not only growth in sales but growth in prices. The Help to Buy Scheme is fuelling this and there is clearly a concern that we are seeing the start of another housing bubble – a very British structural weakness.
Surely, giving a message that interest rates are going to remain low will simply encourage more people to pile into property?
How do you stop a bubble if you do not raise interest rates? If the housebuilders are raising concerns then we are looking at a looming issue.
i would therefore argue that it would surely be better to consider small rises in interest rates before we have another boom followed by the inevitable bust.
David Frost 
I wonder what this really means when they say the bank rate is 0.5%. Anyone can say something like this but are people really lending money at 0.5% and are people really borrowing at 0.5%.?Unless it is known that people are really lending and borrowing at this rate the figure is meaningless.
john w