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You've got to eliminate the negative

Interest rates have lost their power to stimulate the economy, argues David Smith.

Financial crashBefore the financial crisis hit more than a decade ago, the stand-out period in the modern era for low interest rates was the time that covered the Great Depression, the Second World War and its immediate aftermath. The Bank Rate in Britain stayed at the then historic low of 2% from 1933 until 1951, six years after the end of the war, by which time it was considered safe to raise it.

When I used to draw comparisons with that period, it was usually safe in the knowledge that we would not see a repeat of it. Nearly two decades of ultra-low official interest rates? Surely not. Well, maybe.