When will the sugar rush of low interest rates end? Investors suspected the governor of the Bank of England would today warn that borrowing would become more expensive sooner rather than later.
Indeed, as he delivered his opening statement to journalists this morning, Mark Carney sounded hawkish:
As time has moved on and the recovery has been sustained, the economy has edged closer to the point at which the Bank Rate will need gradually to rise.
In central banker language, I could just about imagine this was a steer that rates were on the move.
One measure which would support such a move is the labour market. Earlier today we learned of the largest increase in employment ever recorded.
If you look in the right places, the economy is booming and may need to be reined in.
But as the governor went on and answered questions it became clear(ish) that this was far from a warning. The Bank’s main forecasts on the economy had barely changed since its last quarterly update in February.
It expects growth to steady, inflation to remain under control, unemployment to fall slightly more quickly and housing, well, the red-hot-in-parts property market barely gets a mention in the 50 page report published alongside the governor’s press conference.
In short, the attitude at the Old Lady of Threadneedle Street (as the Bank of England is known) is ‘steady as she goes.’