Economists, politicians, bureaucrats ---- they all appear to believe that a cut in interest rates will persuade intelligent people to borrow more
That people will take on a twenty year + debt on the basis of being now able to afford a loan by the drop in rates --- rates which will inevitably increase in a relatively short period of time
Or that business will suddenly start to spend and borrow more to increase their business which has been shrinking for the last twenty years
The people who you want to spend money are the ones who already have money and need higher rates for confidence in the future, what they get is people who can't pay their debts borrowing more !!
Finally what of the policy whereby the government pushed the idea of the older ones to become self funded, those people who now get zero return on their funds and have to live of their capital.
Capital which, when eroded will force more of them onto Government systems
The only reason that I can see to lower rates is to stop the flow of foreign money out of the country and to make the foreign multi nationals happy
But the governments have got themselves into a hole because of their policies and will undoubtedly continue to apply band aid measures to paste over the cracks rather than fix the problems
