Alf Young: The Bank of England has kept interest rates on hold this month. Even better, domestic gas and electricity bills are set to fall. And bang on cue, magazines and newspapers have been queuing up to tell us we've never had it so good.

SO the Bank of England has kept interest rates on hold this month. Even better, sky-high domestic gas and electricity bills are set to fall, with anticipation of a summer price war to follow. That should take some of the steam out of rising inflation, might even prevent further rate rises this year. And make us all feel better. In any case, demand in the shops is still booming. Record numbers of us are flying long-haul from Scottish airports. And average house values continue their inexorable rise. In short, in material terms, it looks like we've never had it so good. And bang on cue, a number of magazines and newspapers, including the Economist and the Independent, have been queuing up to tell us so.

Sure, there's climate change to worry about. And the state of our pensions. And continuing job losses at the margin-sensitive end of manufacturing. And how little we seem to be getting in return for all the additional billions being poured into public services. And anti-social behaviour. And Iraq. On the other hand, it's cold outside, the way it should be at this time of year. For those lucky enough still to be in a pension scheme, deficits are shrinking. Work remains plentiful. We are living longer and our kids' teeth are no longer falling out before they leave primary school. Most categories of crime are down. And Tony Blair will be gone by the summer.

It's 50 years this July since Harold Macmillan first observed, at a Tory rally in Bedford, that "most of our people have never had it so good". Supermac, as cartoonists portrayed him at the time, was basking in a post-war boom in the global economy. "Go around the country, go to the industrial towns, go to the farms and you will see a state of prosperity such as we have never had in my lifetime - nor indeed in the history of this country," he urged, as memories of rationing, shortages and rampant inflation faded.

Half a century on, any such traveller might be tempted to dwell on the downside - a industrial town such as Linwood, its town centre so run-down it now has to be rescued by Tesco; or the shrinking number of working farms, run by families subsisting on a byzantine government paper-chase, as highlighted by Melanie Reid in this space on Thursday last week. But any honest traveller couldn't fail to notice the burgeoning signs of material plenty - still ill-divided, it's true - but spreading ever wider across the population at large.

The cars, the flat-screen TVs, the do-everything mobile phones, the love-affair with labels. The grab-and-go £3.50 latte or lunchtime wrap which would astonish Supermac's generation in terms of profligacy, offset by the even-more-astonishing taxes-and-charges-only flight to Prague or Dublin for the weekend or that £5 pair of jeans, bewildering to that same post-war generation in terms of how far your money can now go.

Globalisation has done wonders for Britain, claims the Economist. Some of these wonders - penthouse flats looking over London's Hyde Park being marketed at £84m each, or the race to buy up leading clubs in the English Premiership - may be the preserve of Russian oligarchs or American billionaires, who find Britain one of the least protectionist-minded economies on the planet. But on a more modest scale, globalisation, via Britain's growing muscle in the provision of high-value-added goods and services, has made many, many people in Britain, in areas such as financial services, much more prosperous than their counterparts in earlier generations.

Nowhere is that rising sense of material well-being more clearly celebrated than in the housing market. Very few of us have £84m to splash on a penthouse in Mayfair, but from Aberdeen to Greenock we are queuing up to buy our way into a share of the current property boom. Those old industrial towns are, belatedly, participating in this housing bonanza. Redundant farms all over Scotland are being turned into residential steadings, snapped up by a seemingly-insatiable demand for new homes.

It will all end in tears, suggest the jeremiahs. People are mortgaged up to the hilt and beyond. And those whose housing debt has long-since been redeemed, sitting comfortably on an unexpectedly large capital gain they hope to pass on to the kids, still have the rising costs of an extended old-age to meet and the further threat that, once their baby boomer generation starts to wane, house values will spiral downwards as demand for such stock slackens.

It's a seductive scenario. But I've yet to meet anyone in the property world who gives it much credence. Mortgage providers, house builders and other sector professionals will readily concede there's already an emerging over-supply of two-bedroom high-rise apartments in Scotland's city centres, built primarily to supply young, professional singletons and the buy-to-let market. But demand for family homes, across both urban and rural Scotland, still appears insatiable, they argue.

It is true that house prices in Britain have nearly trebled in the past 10 years. Household debt, which stood at around 100% of disposable income when Labour came to power, has now risen to 160%. Were these trends to continue at that pace, the situation might well prove unsustainable. But straight-line projections of what has happened in the recent past into the near future rarely accord with unfolding reality.

Markets adjust. People moderate both their behaviour and their expectations. Bubbles sometimes burst. More often, froth subsides. This baby boomer generation, the wealthiest generation this world has ever seen, will be around for a few more decades yet, exploiting its considerable spending power in all sorts of new ways. Satisfying that demand will attract more migrant labour to these shores, much of it young, some of it choosing to put down roots here.

Our demographic decline is already showing tentative signs of reversing, buoyed both by such inward migration and by a recovering birth rate in the indigenous population. That trend alone, if sustained, is capable of banishing the more apocalyptic visions of the housing jeremiahs.

Of course, four years after Harold Macmillan talked of most Britons never having had it so good, he was imposing an unpopular wage freeze to curb rising inflation. Two years after that, with his government embroiled in the Profumo scandal, he quit on grounds of ill-health. But, despite periods of retrenchment along the way, more and more people in Britain continued to prosper. And still do to this day.