After a decade of ultra-low rates, many predict a rise this week. Vital for controlling inflation and saving Bank chief Mark Carney’s face, say the hawks. A terrible idea in a weak economy, argue doves
Markets have a tendency to panic when central banks threaten to raise interest rates. In 2014, the US Federal Reserve and its then boss, Ben Bernanke, sent traders across the world into a spin when he merely hinted that the era of almost zero rates might be ending.
It’s been a decade since the Bank of England last increased the cost of borrowing, so it is no surprise that this week’s vote by the monetary policy committee, which Threadneedle Street has sketched out as a good moment for a rise, is being closely watched.