Comment: At last, it is OK to express concern about low interest rates

Cash savings get almost no return in current interest rates
Cash savings get almost no return in current interest rates

George Osborne admitted this week that a low interest rate policy had side effects.

The prime minister, Theresa May, is said already to harbour such concerns.

Mr Osborne, who was chancellor until Mrs May sacked him, said that low rates had made the rich richer.

One of the obvious problems with long-term ultra low rates is that they have made assets much more valuable, which helps the rich.

The biggest asset that most people are ever likely to own is a home. Low interest rates have, for obvious reasons, helped to keep the value of that asset high.

Even in Northern Ireland, property prices are far above in real terms where they were in the 1970s and 80s, despite the crash of the last decade.

This is partly because interest rates are so low and partly because people are living longer and occupying the limited supply of family homes for at least a decade longer than previous generations did.

For many years now we have been told that interest rates must remain low for the sake of the whole economy.

People who worried about high house prices and the low return that prudent savers get on their cash kept quiet, partly perhaps out of fear of seeming economically ignorant.

But some of us are worried about what permanent ultra low rates do to the overall financial culture of society.

Being cautious about how much you borrow and diligent about saving some of your hard-earned cash for the future are virtuous qualities. We should be concerned if our culture loses sight of that fact.

• Ben Lowry (@BenLowry2) is News Letter deputy editor

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