The only certainties in human life are death and taxes. Interest rate movements do not feature in this elite group. However certain the world's experts are today that the Bank of England will announce an interest rate rise tomorrow - making it the first since May 2007, to 5.5% - it isn't over till the governor sings.
The shadow monetary policy committee assembled by The Times argues in the newspaper this morning that the Bank must raise interest rates by a quarter of a percentage point to 0.5%. This committee says the need for emergency stimulus is over and the Bank's credibility is at stake.
But the real MPC voted by a hefty margin of 7-2 at the last meeting. Has so much really changed in the weeks since September 14? Does reported UK growth of 0.4% in the third quarter of the year, against the expected 0.3% - really justify tightening?
BofE governor Mark Carney, courtesy of BofE
Rate rise unanimity
Market commentators are almost unanimous in their belief that, combined with the rise in inflation largely caused by the fall in the value of sterling in the wake of the Brexit vote in June 2016, it does exactly that. Who are we to question their credentials?
Currency specialist Xe said yesterday evening: “As of today, the markets are pricing in a 90% chance of a rate hike.”
The aptly named Bill Street, head of Investments for EMEA at State Street Global Advisors commented following the publication of State Street's Brexitometer index that sterling's rise from its lows earlier in the year partially reflects US dollar weakness but also greater than expected resilience from the UK economy and expectations of a rate rise.
The ever quotable Bill Blain, head of capital markets and alternative assets at Mint Partners and a regular commentator on the long-term distorting impact of quantitative easing, addressed the issue in his Hallowe'en Porridge bulletin.
“Back to the Bank of England – it’s the last inflation meeting this year, and there is a good chance they will hike from the historic low of 0.25%,” he wrote.
“Why? Many folk fear it's premature and an unjustified risk – but with employment at a record tight 4.3%, rising inflation and concerns about the effects of ongoing monetary policy stimulus and unintended consequences – perhaps it’s time to hike to 0.5%.”
Make no mistake. If the experts are to be believed, if ever anything were an absolute racing certainty, this is it. But no one who remembers the certainty that Liverpool FC would beat Wimbledon in the FA Cup final in 1988 FA Cup will be betting the mortgage on the outcome.
Liverpool lost, of course, as Wimbledon FC pulled off one of the biggest footballing shocks in recorded history.
This is not the only caveat on offer to contrarians. Another comes from Azad Zangana, senior European economist and strategist at global investment house Schroders, referencing the description of governor Mark Carney as an unreliable boyfriend (Pat McFadden, Labour MP, 24 June 2014.).