by Roger Bootle
On Thursday the Monetary Policy Committee (MPC) will announce its latest decision on interest rates. Not long ago, there was a good chance that they would cut rates from the current 0.25pc to perhaps 0.10pc.
I suppose they may still do this. But the arguments are now stacked against it, especially after last week’s news that in the third quarter of this year, our supposedly Brexit-wracked economy grew by 0.5pc, considerably exceeding official expectations.
Who could have imagined it? Who indeed? The policy of ultra-low rates, bolstered by Quantitative Easing (QE), seems both perverse and unjust to many people (including the Prime Minister). But in pursuing this approach the Bank of England has merely followed the modern orthodoxy. The two major questions now are whether in today’s conditions the orthodoxy is correct; and, even if it is, have conditions so changed as to warrant a different policy setting?