NOT everybody is happy with ultra low interest rates and there is increasing scepticism about the effectiveness of the Bank of England’s Quantitative Easing policies.

At the time of the global downturn in 2007-08 there was strong support for the concerted action of the central banks.

Now, however, after almost five years of accommodative monetary policy, it is not only pensioners, pension funds and savers who are complaining about low interest rates.

There is now a growing body of opinion who feel that not only is this policy not providing the traction for economic recovery but that it is also storing up trouble for the future.

Recently the Bank for International Settlements suggested that the current policies have contributed to the recent strength of commodity prices thus raising the cost of living. They are also having implications for balance sheet repair whilst at the same time undermining the urgency to deal with either of these issues.

Other critics have said that low interest rates were keeping savers from generating income and that rates should really be nearer 3%. Howeve, this would be against current market consensus which supports maintaining the status quo and perhaps providing further stimuli if required.

Persistent loose monetary policy is largely the result of insufficient action from the Government in addressing structural problems. There is then the danger of becoming too reliant on the policy, and thus losing the will to do anything constructive about the inherent problem.

Investors in the equity market have been worried about this “fix” for some time, but tend to have been rather more encouraged by the dividend yields that equities offer. This confidence has been helped of late by some excellent corporate results showing the resilience of this sector of the economy.