Belfast Telegraph

Rise may come before it's needed

By David Elliott

Interest rates will rise, but even the people who will hit the "hike" button don't know when it'll be.

That seems to be the not-unexpected situation we find ourselves in amidst a whirlwind of speculation.

Money markets have pencilled in a mid-2015 hike from the current level of 0.5% and there have been various raised eyebrows and winks from people of influence, but none of it amounting to forward guidance giving us a definite steer.

Monetary Policy Member Spencer Daly, on a visit to Northern Ireland, said categorically he doesn't know when interest rates will rise and you would hope none of the other nine members do.

They're meant to be reactive to the economic conditions, something which is increasingly difficult to predict in these times of seeming recovery.

Mr Daly praised the Northern Ireland businesses he has visited over the last few days for their courage to invest during difficult time and their ability to target export markets and said that while the economy here seems to be lagging a little behind the rest of the UK, it's "heading in the right direction".

That's encouraging but no matter how broad the central banker's experience of the economy here is, there's still a worry that we represent such a small part of the UK economy that we may have to put up with a hike in interest rates when more prosperous regions' growth rates need cooling, but before we're back on our feet.

Time will tell but in the meantime we need to get our economy back up and running as soon as possible. There's no time to waste.

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