On balance, I’d vote for a rate rise and a stronger pound

Since Article 50 was triggered last week, City traders have been avidly watching the fluctuations of the pound. Analysts at Barclays, Nomura and Citigroup think sterling is undervalued against the euro and the dollar, and due for a rebound, having dived in the market tizzy that followed last June’s referendum and kept its head down through the phoney war of the past nine months. As ambiguity over Brexit terms begins to recede, says the City, it’s time for the pound to perk up.

Well, maybe — as I’m often moved to observe in relation to bald economic statements. Let’s take a closer look. The sudden fall last summer boosted UK exports and tourism, but was by no means the only factor that kept the economy buoyant after the Brexit shock: consumers shrugged off fear and returned to spending as though nothing had changed, encouraging employers to go on investing and creating jobs.