The interest rate rise is better late than never

When interest rates were lowered to an ‘emergency’ level of 0.5 per cent in 2009, the market consensus was that rates would probably rise again by the following February. I am sure that absolutely no-one would have predicted we would have to wait until 2nd August 2018.

Not even Mark Carney, then still governor of the Bank of Canada. How many times has he given us ‘guidance’ on when interest rates would rise – only for it to be no guide at all? Exactly five years ago, for example, he said that rates would rise once the unemployment rate, then 7.8 per cent, fell below 7 per cent. It is now 4.2 per cent, lower than at any time in the past 45 years. And of course when Carney and his committee did eventually changes rates it wasn’t a rise – it was yet another ‘emergency’ cut to 0.25 per cent in August 2016 when he believed, falsely, that the Brexit vote was going to throw the economy into reverse.