Low interest rates are doing more harm than good – quadruple them and see what happens

Low interest rates are damaging the economy, says Merryn Somerset Webb. They aren’t making people borrow and spend, they’re making them worry about their retirement – and save.

I've been boring you all for a few years now on the pernicious effects of very low interest rates. I've said more on the subject in my editor's letter in the magazine this week. But I'm pleased to see that the group of people who think that low rates are now doing more harm than good is expanding fast. Here's a quote from Blackrock's Larry Fink that pretty much exactly reflects our thoughts on the matter.

"There has been plenty of discussion about how the extended period of low interest rates has contributed to inflation in asset prices. Investors are being forced to trade liquidity for yield by taking on more risk and investing in less liquid asset classes a potentially dangerous combination for retirement savers.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.