Today's data suggests that the economy is still growing very quickly, despite the recent hikes in interest rates. These hikes may have hit the housing market, but the real sector remains largely unscathed.
However, UK inflation remains uncomfortably high at 4.2 percent. Oil prices are approaching $100, while world commodity prices are increasing rapidly.
What does this mean for future interest rate policy? First, in terms of growth and inflation, there is no justification for any cuts in the near term; growth is strong and inflation is too high. Second, any near-term cut in rates would, in effect, be an effort to bail out the housing sector.
Of course, bailing out BTL speculators is not part of the mandate of the Bank of England, yet somehow, one suspects that a cut is coming. The BoE may have gained its independence from the government but it is now captured by vested interests in the mortgage and housing industry.