Interest rates in Australia and around the world have hit historically low levels. So low, in fact, that for around 30 per cent of developed countries, investing in government bonds will provide negative returns after adjusting for inflation.
Why are interest rates so low?
In its simplest terms, the Reserve Bank of Australia lowers interest rates to stimulate the sluggish economy. Lowering interest rates makes borrowing cheaper and more borrowing means more businesses are established, more is consumed and more jobs created.