The case for higher, normalised UK interest rates
To begin with the obvious: the interest rate is a price. On one hand it is the cost of borrowing and, on
the other, the reward for lending. It is the going rate of exchange for intertemporal money transfers.
In a capitalistic economy, borrowing and lending are fundamental to economic growth, the creation
of wealth and the distribution of rewards.
This paper was commissioned by the CEME as part of a study as to why saving matters.