Cannydc wrote:Yes, it is historical context, but only based on very recent history, ie what has happened in the last few months.
Interest rates are set by industrial, economic, inflation and jobs data. The balance is to keep rates as low as possible without causing inflation to rise unduly.
It also allows consistent growth which in turn allows us to lessen the countries debt by increasing tax take.
Economics 101 - low side interest rates are good if inflation is held at around 2 - 3%, which it was in the noughties.
House prices are, IMHO, a red herring brought about by a combination of hype and a sense of entitlement mixed with desperation.
They should also be set according to historical data, the kind of data that shows what causes a depression/ recession. Being so short sighted as to only look at the previous few months data has clearly cost us in the long term.