Bank of England decision to tie interest rates to unemployment will continue to punish savers and retirees
The message is clear: savers can go hang. New Bank of England governor Mark Carney is going to make life a misery for the next three years for anyone who saves, is approaching retirement or is running a pension scheme.
The governor's promise not to raise interest rates until unemployment drops below 7%, although much caveated, has dramatic implications for everyone's personal finances.
The biggest winners are those who can afford to buy a house now or who already own property. Don't worry if you have a jumbo mortgage, Carney is effectively saying ultra-low interest rates are here to stay.
Every lever in the housing market is now pressed down at full throttle: Funding for Lending is pumping billions into mortgage lending; Help to Buy, part two, begins in January when the government starts underwriting billions more in loans; while any household that has been cautious with its finances for fear of a rise in the monthly cost of their mortgage is being told it is safe to spend, spend, spend.
The shop tills will ring. Car dealers will be delighted. Estate agents will cash in. Carpets shops, curtain makers, kitchen fitters and bathroom installers will be rejuvenated. The "escape velocity" Carney wants for the British economy may arrive sooner than we think (though much of it will be imported).
Does any of this sound familiar? Did we not spend much of the last decade borrowing too much and pumping up the housing market with easy money? Is Carney at risk of repeating the mistakes that caused the financial crisis in the first place?
The advice for anyone who has been thinking of buying a property but was worried that interest rates will rise and prices drop back, now has to be to rush out and grab something as soon as possible before they move even further out of reach.
A rising tide lifts all boats, and my guess is that the parts of the property market that take off under the Carney boom will be the areas that have until now been neglected.
So rather than London, Oxford and Brighton leading the way, the lesser towns may see the biggest percentage gains. Hastings (half the price of Brighton, give or take), Romford (half the price of Hackney), Ipswich (half the price of Cambridge) are the sorts of towns that could see the biggest relative, if not absolute, price rises.
Short-term fixed-rate mortgages, often sold as "peace of mind" for those with big loans, are now virtually pointless. Why take a two-year fix (and pay the often hefty fees attached) when you know that interest rates aren't going to rise until late 2015 or even 2016?
A better bet are the five-year fixes which currently start at about 2.59% for people with lots of equity in their home. Maybe we will see these rates, and those for 10-year deals, fall even further.
What will savers and pensioners do? The 1%-2% rates many receive on their cash Isas and deposit accounts are well below the nearly 3% inflation rate Carney appears to be prepared to tolerate. That means that year in, year out the real value of their money will continue to fall.
The alternative is to be "adventurous" with your savings, though to other people that spells imprudent. The buzz right now is peer-to-peer lending from the likes of zopa.com and FundingCircle.com. The idea is that you cut out the banks by using the internet to directly connect your savings with borrowers in need of a loan. Rates on offer to investors (a better word to use than depositors in this instance) are projected at about 4.6%. But there is always the risk of defaults, and your money is not protected by the Financial Services Compensation Scheme.
About the grimmest outlook is for people who have saved most of their lives in a stock market-based pension scheme and are now two or three years from retirement. That money has to be converted into an annual income, called an annuity, and the already dismal rates on offer may fall even further.
"We now know annuity rate rises are unlikely for three years," says pension expert Tom McPhail at Hargreaves Lansdown, which is about the best gloss you can put on it. I'd love to say "here are the things you can do to get around it". But really, are there any?