The governor, Mark Carney, began the campaign at a lecture in Lincoln Cathedral in July, in which he said Threadneedle Street would start looking at raising borrowing costs around the turn of the year.
Since then, other members of the Bank’s monetary policy committee have hinted that they too could soon be voting for the first increase in interest rates in more than eight years.
The problem for these putative hawks is that the economic data does not suggest there is any need for policy to be tightened.
Figures out this week showed inflation falling back to zero and unemployment rising. Now the Office for National Statistics has published figures for retail sales showing high street and online spending growing modestly for the second successive month.
While growth in average annual earnings has picked up to 2.9% – its highest in six years – this is still low by pre-recession standards. More significantly, bigger pay packets do not seem to be translating into higher inflation. Consumers, judging by the retail sales numbers, are still reluctant to part with their money.
There is no immediate threat of the economy relapsing into recession, although the combination of weaker factory output and the slowdown in retail activity means that growth in the third quarter is unlikely to match the 0.7% notched up in the second quarter. At this stage, the economy appears to be going through a soft patch rather than something more serious.
Even so, the soft patch has implications for the Bank, because the monthly decision by the MPC on interest rates is data driven. Members of the committee have started to talk like hawks but slower growth, zero inflation, rising unemployment and consumer caution means they are likely to continue voting like doves.
This article was written by Larry Elliott, for theguardian.com on Thursday 17th September 2015 12.35 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010