Lock ten economists up in a room, the old saying goes, and you’ll get 20 different opinions.

Last week we were told that the fall in the Westpac-Melbourne Institute index of economic activity and new residential building activity meant there was pressure on interest rates. Today, however, Treasury secretary Ken Henry is waving the big stick at the Reserve Bank in The Australianin advance of the release of CPI figures, scaring them off any idea of raising rates when they meet next week.

Henry has warned that attempts to slow the economy by raising interest rates could end in recession, according to economics editor David Uren. “We know from history that growth cycles tend to end untidily,” Henry yesterday told a business seminar organised by the Melbourne Institute of Applied economic and Social Research. “Macro-policy makers, who seem to seek to bring them to an end, don’t have that objective, of course. Rather, their goal is usually described as a soft landing… Instead, policy-induced softening usually, if not always, ends in recession.”

The UN’s Economic and Social Commission for Asia and the Pacific (ESCAP) annual survey yesterday warned just how dangerous that would be. It’s raised concerns over Australia’s low domestic savings rate, rising debt-service costs and investment income outflows as key factors affecting the outlook.

Our current account deficit is currently about 6.2% of overall output and widening. Foreign debt levels, now at more than $400 billion, have also risen, reaching about 49.2% of GDP, from 40% in 1998.

Most worrying for pollies and punters must be the high levels of household debt – currently running at 140% of disposable income. They’ll all be hoping that rates stay static – let alone that that recession doesn’t come.