Why are interest rates so low?

[TooLateForAName]

As a relative numpty at economics I'm struggling to understand why interest rates are so low.

Economy doing badly, hence higher risk of default, surely interest rates should be higher?

What am I not understanding?

[TooLateForAName]

Sarnie said:

TooLateForAName said:

Economy doing badly, hence higher risk of default, surely interest rates should be higher?

If rates were higher do you think the risk of default would go up or down?

Does that really drive interest rate levels? That's a consequence rather than a driver isn't it?

Are the banks that frightened? Are we in an even worse state than I thought?

Is there a quick guide to how interest rates are set? How much control does the government/boe actually have vs the banks/finance institutions/traders?

[TooLateForAName]

My interest arises more from the not having debt and being hacked off with low returns vs inflation. In real terms interest rates on savings are negative.

[TooLateForAName]

fid, that's what worries me.

But is there any way out of this (as someone already called it) catch-22?

I'm of the view that we are stuffed.