Bank of England interest rates: Guessing game has ended with the right answer

What a bunch of teases. Having led us to believe it was touch and go — 50/50 — whether we’d have a rate cut or not today, turns out the coquettes at the Bank of England were overwhelmingly in favour of doing the right thing: nothing.

Right up until this morning, the markets were split down the middle despite those strong economics surveys in recent weeks. The reason was that while the surveys were strong, the official, sealed-with-wax Office for National Statistics figures from November were weak.

In fairness to the City’s gamblers, it wasn’t just that. Certain Monetary Policy Committee members — Governor Carney among them — had dropped the odd hint that it might be time to cut.

Nonsense.

Anybody with a line into the City or a company boardroom can tell you the economy has had a bounce since the election. Quite how much we don’t know yet, but there’s a definite spring in the step of UK business after three years of Brexit dither.

A rate cut would be to wilfully ignore all that and — more likely than not — necessitate a reversal in a few months’ time when the data backs up the anecdotes.

Another thing: we may be seeing no action to boost the economy further from the Bank, but we are getting some from Downing Street. Chancellor Sajid Javid has already said he’ll boost public spending 4.5% and is likely to announce more tax cuts and spending in his March Budget.

That welcome fiscal boost could be of a shot in the arm to the economy by itself. Far better to wait and see before taking a knife to already low interest rates.