Do super-low interest rates help the economy or hurt it? Economic models (the ones that central bankers use) tell us they help it. Low rates cut the costs of both servicing existing debt, and taking out new debt. This encourages some to spend, and some to borrow and spend.
The transmission mechanism is easy and obvious. Anyone who can't see how it works or who is calling for rates to rise when the global economy is still so 'abnormal' is therefore an obvious idiot. Or that is how the average economist sees it. We disagree. Why? Because the macro economic models we use today take no account of changing demographics and of behavioural incentives.
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NS&I cuts interest rates on 7 savings products – full list of changesThe cut means NS&I’s savings bonds are far less competitive than other fixed term bonds on the market. We look at what’s changed.
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Cash ISA changes: Can Reeves create the culture shift needed to get savers to start investing?Opinion Rachel Reeves will reportedly cut the cash ISA allowance this month - but, without a significant campaign to encourage investing, a limit on cash ISAs will not shift the deep and culturally embedded mindset that stops people from investing in the first place, says Kalpana Fitzpatrick
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