For how much longer can the Bank of England base rate remain at 0.5pc?

This is not a mock GCSE economics question, but a serious poser for savers and investors grown tired (and poorer) as a result of the adverse impact other people's stupidity (see various references to bankers and politicians) has had upon their lives and capital. Nor is there any immediate indication that matters are about to improve.

Indeed, as the first signs of winter drifted across 'austerity Britain' this week, so the country took on a greyish pallor. Untreated potholes and cracked pavements are only going to deteriorate as regular, increasingly severe, frosts commence their relentless attack. Regrettably, the nation's road network has become a bleak, colourless, metaphor for our savings' abysmal performance.

Most worrying is that there's little sign of any respite. We're reliving the seventies and there's no evidence that salvation is near. Quite the contrary. When the governor of the Bank of England, a man who chooses his words with utmost care, warns of the 'extraordinarily threatening environment' into which we've moved, you know something potentially catastrophic is on the cards.

This sounds like a rather gloomy assessment, but I fear that, for most of next year at least, our collective lot will fail to improve. Interest rates are likely to remain extremely low and returns will be similarly depressed.

I base this cheerless summation on an analysis of how most major stock markets have performed over the past couple of years. Up until the point at which financial crisis hit a pitifully ill-prepared Britain (for a contemporaneous account of mass government panic, read Alistair Darling's Back From The Brink), markets tended to anticipate what was about to happen rather than react to specific, especially political, events.

Since 2008, market behaviour has changed radically. Today, whenever disappointing news is announced, markets react immediately and, almost invariably, negatively. Stock market behaviour has shifted; it now focuses almost exclusively on the short term.

Markets had previously shown confidence in those politicians newly-charged with extricating over-regulated or poorly-run economies from the mire, nowadays, they cannot see any light at the end of a long dark tunnel. In other words, equity markets are presently being driven by politics rather than financial fundamentals, meaning they will remain volatile.

It's also fair to say that while economic growth remains negligible at best, even a comparatively minor shift in market confidence can have a heightened impact on the economic cycle – up or down.

So how does the saver / investor cope?

The short answer is 'with difficulty'. There's increasing evidence that disappointing returns are prompting both groups to become more adventurous when it comes to making investment decisions.

There is little harm in allocating some 'speculative' money to alternative invest-ments such as fine wine, stamps or gold, provided the investor doesn't 'go for broke' and throw everything into what are often illiquid alternatives.

A better option might be to concentrate on first-rate companies offering solid income streams that are likely to continue well after the current crisis has subsided – as it eventually will. That, at least, is the good news.