POLICY-MAKERS would do well to take note of warnings this week from Scottish economist David Bell and former Treasury Select Committee chairman Lord McFall about the dangers posed by high consumer debt and elevated house prices.

Their comments are among myriad reflections on the state of the UK, 10 years on from the start of the global financial crisis in 2007.

After the financial crisis took a lurch for the worse in autumn 2008, bringing Royal Bank of Scotland and HBOS to the brink and leading to these once-proud institutions being bailed out to the tune of tens of billions of pounds, the Bank of England slashed benchmark UK interest rates.

By March 2009, rates had been cut to a then record low of 0.5 per cent, a level that would have been entirely inconceivable in any kind of normal circumstances. And, as shockwaves emanated from the Brexit vote in June last year, the Bank cut UK base rates by a further quarter-point to just 0.25 per cent last August.

All of the interest-rate cuts from the autumn of 2008 onwards have effectively been emergency moves. They could be viewed as desperate measures. And you only need to look at the prevailing 0.25 per cent base rate, and warnings from the business community about the dangers of raising benchmark borrowing costs, to realise we are still a very long way from economic normality.

The Brexit vote has obviously taken us even further down the rabbit hole. We now find ourselves in an even stranger world, in which those in the UK Government pursuing Brexit seem oblivious to the economic damage being caused by what they are doing. As if things were not bad enough already.

One of the big UK economic curiosities, and one that had developed before the Brexit vote, is the heat in the housing market.

While a curiosity, it is also a matter of simple arithmetic. Interest rates are at rock-bottom and, as we know all too well from past and sometimes bitter experience, benchmark borrowing costs have a very close relationship with UK house prices.

It also seems at the moment that the supply-demand mismatch is driving UK house prices higher. Normally, affordability would be a brake on how far this could push house prices upward. But the problem is, with base rates at a record low, mortgages are currently very affordable by historic standards in terms of monthly repayments. And those with significant equity to put up might well even be able to lock in low interest rates for a long period.

All of that said, the heat in the housing market is a curiosity. We are, after all, living in grim economic times. UK growth is way below its long-term average and has disappointed for many years under the Conservatives. Figures published this week by the Office for National Statistics show households are suffering continuing falls in real wages. And that is even before we get to the Brexit calamity.

Yet UK house prices are, in many parts of the country, well above even their heady levels before the global financial crisis unfolded.

This looks a lot like a huge problem for the future. In the meantime, it is a major cause of woe for young people.

Mr Bell, professor of economics at the University of Stirling, declared “the younger generation find it very difficult now to access housing”.

This is a sorry state of affairs, and a big social as well as economic problem in a country in which, unlike some other European nations, the structure of the rented sector is very far from ideal for tenants.

It is not a complex calculation to work out that many flats that might have been within reach of people in their early twenties or even late-teens a quarter-century ago are now way too expensive for them, in absolute terms and in relation to lenders’ still-high price-to-earnings multiple caps.

The housing market had already raced away from the reach of many people in the years immediately prior to the financial crisis.

However, instead of the crisis restoring the market to some kind of equilibrium as some might have expected, the resultant record-low interest rates have ultimately sent house prices skywards again.

Not surprisingly, the UK housing market is one of the key areas of focus in the debate over intergenerational fairness.

Such fairness is crucial, from the viewpoint of society.

However, while it must be pursued, we should also ensure companies or the UK Government do not seize upon this endeavour as a means to cut their costs by heading for the lowest common denominator.

This danger can be seen increasingly in the pension arena.

Some big companies have been developing the argument in recent times that it is not fair that the pension arrangements of younger or newer employees are far inferior to those of older or longer-serving staff.

However, what actually seems to be happening in some instances is that companies are harnessing the politics of envy in this context to push through major changes to pension arrangements and, crucially, reduce their costs. There seems to be a growing narrative that the unfairness of the situation means mainly that longer-serving employees’ future pension provision should be cut. This is a nonsense, and trade unions must be wise to it.

A similar strategy often seems to be employed in the corporate world to bring down overall salary levels. Some of the talk around possibly lifting the public sector pay cap only for lower-paid workers signals the UK Government could follow the corporate approach to eroding pay.

But the solution to this huge issue of intergenerational fairness is surely, as far as is possible, to ensure younger or newer employees, like older or longer-serving workers, have adequate provision for their retirement and decent salaries.

This is obviously important in terms of fairness but it will also be crucial to the health of the UK economy in future years.

It may require a huge reassessment of priorities by companies, many of which seem focused too sharply on shareholder returns at the expense of their employees, and by the UK Government, which really needs to stop its war of attrition on public sector workers in terms of pay and cuts to pension arrangements. But there is no reason it cannot be done.