Why are interest rates at crisis levels?

Why are interest rates at crisis levels?

clock

One of the adjectives more commonly used to describe the recovery is fragile.

But does the supposed delicate state of the economy reflect its true condition, or merely our perception? What will be the traits that might emerge in the future that will lead us to conclude it is no longer so brittle? My conclusion is that the economy is not now so fragile it cannot cope with the first steps being taken to normalise monetary policy. Indeed, I feel strongly that beginning to edge interest rates higher will not undermine the evolving recovery, but will make it more robust. A recovery that can be maintained only on the basis the bank rate remains at 0.5% will become...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

Four potential 'black swans' for 2025

Four potential 'black swans' for 2025

'Four unlikely but nonetheless plausible scenarios'

Nathan Sweeney
clock 03 January 2025 • 4 min read
What two pizzas tell us about Bitcoin

What two pizzas tell us about Bitcoin

Laszlo Hanyecz really needed a slice...

Laith Khalaf
clock 19 December 2024 • 6 min read
Rise in UK inflation 'unwelcome' ahead of BoE interest rate meeting

Rise in UK inflation 'unwelcome' ahead of BoE interest rate meeting

Bank of England MPC meeting due on Thursday

Sorin Dojan
clock 18 December 2024 • 3 min read