The Monetary Policy Committee will probably keep interest rates at 0.5% and chug on with their programme of quantitative easing. This policy will keep house prices higher than they need to be, will keep many savers starved of a proper return, will extend the government bond bubble,encourage too much debt and do nothing to sort out the huge imbalances in our distorted economy.
Sometime the authorities have to
1. End quantitative easing
2. Curb the public deficit
3. Bring the recommended interest rate into line with the reality of what banks are offering and charging
4.Offer help in the form of lower taxes and less regulation to the exporting private sector, to slash the trade deficit further
They may not want to start to do this even now, but they could at least tell us they want to do it, and sketch a timetable for returning their management of money markets to something more normal. Otherwise it will look as if they are just going in for a political fix for this year, delaying the essential adjustments the economy needs to make.