Bank keeps interest rates on hold in face of 'unusual uncertainty'

“Bank warns resurgent virus could threaten economy”or “Bank says recovery is stronger than expected”.Both headlines are accurate so take your pick, although it’s worth noting that the first is essentially a statement of the obvious.

The latest minutes of the Bank of England, published at lunchtime, are neither optimistic nor pessimistic.

Instead they set out the perfectly reasonable view that the economy has rebounded rather well since May but that almost anything could happen next.Debit and credit card spending has returned to the levels we saw before coronavirus reached UK shores but some sectors of the economy - aviation, hospitality, leisure and parts of retail - are still in all kinds of trouble.The number of paid employees has fallen by around 700,000 - far less that many feared - but there’s no way of knowing how high the unemployment rate will rise when the Job Retention Scheme ends in October.

The Bank of England Credit: Yui Mok/PA

Thus-far the recovery has looked bushy-tailed but the past is not a guide to the future.

The rise in the infection rate is concerning, the inadequacies of the testing system are deeply disturbing, the risk of a no-deal Brexit is getting higher, pushing the value of the pound down.There’s a lot that could go wrong as the days get shorter and the temperature falls. Likewise, an effective vaccine may suddenly appear, in which case things may quickly return to how they were.As the Bank notes, “the outlook is unusually uncertain.”

Better to wait and see. Bank Rate remains at 0.10%, the UK government bond purchase programme holds steady at £745 billion."We expected interest rates to be 0.10% or less for the next five years," declares Capital Economics.

It’s hard to argue otherwise.