We'll do the right thing at the right time on rates. This is the newguidance from Mark Carney, Governor of the Bank of England.
It has a reassuring feel to it - "don't fret about interest rates, just leave it to us" - it seems to say.
And it's the Governor's attempt to exit a hole he dug for himself when he seemed to indicate last summer that the time to consider the first interest rate increase in years would come at the turn of the year.
We're half way through January and Mr Carney has set out a speech todaythe three reasons why it's not yet time to put up rates after all.
First, the economy isn't yet growing fast enough there isn't thesustained momentum he wants to see, in fact it has slowed since 2014 and,separately, the IMF today forecast UK growth to remain stuck at these levels for the next couple of years.
Second, costs in terms of prices and wages need to resume a pathtowards inflation at 2%.
Earlier this morning we learned that the official measure of inflation rose from 0.1% to 0.2%.
If I were writing an eye-catching headline, I might be tempted to write INFLATION DOUBLES IN DECEMBER!!! but this wouldn't be enough to tempt the Governor.
Finally, a measure of prices called ‘core’ inflation which strips out volatile elements like food and oil also needs to be rising for him to want to put up interest rates. And it’s not. At least, not yet.
Mr Carney points to a lot of factors which have changed since he made his “turn of the year” speech in the summer: “The world is weaker and UK growth has slowed.”
He says in the speech, pointing to China’s slowdown, with “strikingly weak” trade which has particularly hit the UK as our exports to China dropped by a third in the year to November.
The dramatic fall in oil is helping keep inflation down. There hasn’t been the lift-off in pay that he and others at the Bank expected.
So we should stop fretting about when rates are going to go up. “This journey doesn’t have a set timetable ; only an expected direction of travel,” he says, concluding, “The journey to monetary policy normalisation [interest rates at their normal levels] is still young.”
In other words, interest rates, in his view, are unlikely to move soon but keep an eye on the key data, not a fixed point in time.
This guidance is welcome, in a world where speculation about the Bank’s first move is becoming very confusing as economists have been predicting a hike in November (or even May) this year, while investors have been betting on a rate hike well into 2017. It seems the latter may be right … but I didn’t tell you that, it all depends on the data.