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All bets are off again as bank shuns QE gamble

During the boom times, Bank of England interest rate meetings caused a bit of a kerfuffle in news rooms around the country.

Huge bets were placed - normally cups of tea, coffee, perhaps even buns - on whether the Monetary Policy Committee would raise or lower rates at midday on the allocated Thursday and it wasn't uncommon for victory parades to follow.

Not so anymore. The chances of an interest rate hike from the current historic low of 0.5% are now akin to the chances of me scoring the winning try in the Rugby World Cup final. I know what you're thinking 'maybe he's been in secret training with the Ireland squad', but I can assure that is not the case.

So with the odds of the bank doing anything remotely interesting greatly reduced, interest rate Thursdays have become a bit of a damp squib and the kettle has remained cold.

But it was back to some form of normality yesterday in terms of the 'will they, won't they?' stakes, with rumours that quantative easing (QE to you and me) was on the table at the meeting in Threadneedle Street.

A raft of negative data over the last few weeks had given rise to expectations that governor Mervyn King and his cohorts might decide to get the Royal Mint's printing press rolling to try and stimulate an economy that seems to be stuck in first gear.

Obviously that's a very simplistic explanation of QE - which by the way doesn't involve any actually note printing, merely the purchase of government bonds - but for the purposes of this article provides a bit of colour and hopefully stops your eyes rolling back in your head when you see the term 'quantative easing' mentioned.

But the bank brushed over the QE issue and said it wouldn't increase the £200bn figure it has already pumped into the economy in recent months.

A brave move, say some experts who were hoping the bank would bow to pressure and pull the QE trigger. They reckon it could be the only thing which keeps the UK economy from succumbing to the dreaded double-dip recession.

Poppy cock, say others, pointing to still strong inflation rate which means the bank's hands are tied when it comes to trying to stimulate the economy.

That, they say, is why interest rates were kept on hold again and why there's no chance of them rising anytime soon.

Still, I won't give up hope that Ireland coach Declan Kidney will call to tell me to jump on the next plane to New Zealand.