Is the UK set for its 15th consecutive interest rate hike later this month? Markets expect that rates will peak closer to 6 per cent – up from 5.25 per cent now – but this might not happen immediately – or at all. Speaking at today’s Treasury Select Committee, the Bank’s governor Andrew Bailey suggested rate hikes were no longer a matter of certainty, as the headline rate of inflation is now back on track with the Bank’s projections for a significant fall by the end of the year.

Speaking to MPs this afternoon, Bailey said that the UK had moved on ‘from a period … where it was clear rates needed to rise going forward,’ insisting ‘we’re not in that place any more’. He is in no position to say what will happen later this month when the Monetary Policy Committee meets: whether rates rise or not will be determined by their vote. But Bailey did put more emphasis on the idea that the MPC could vote to hold the rate at 5.25 per cent – a decision that will be unveiled on 21st September.

Before we get too excited about the prospect of the MPC pausing a rate rise, we should remember that we’ve been here several times before. At the start of the year, the MPC’s minutes said repeatedly that ‘persistent pressures’ would need to be evidenced for them to keep hiking rates. Indeed, that evidence was provided, as the headline rate refused to budge and core inflation was still on the rise. The UK economy has proved very resilient to the rate rises so far – which do take time to be felt across the economy – but have so far done less than the Bank expected to weigh down spending.

Bailey suggested that the decision may largely come down to what the MPC sees in the latest labour market data, which will be made public next week. Bailey and his committee continue to put great emphasis on the prospect of a wage spiral (arguably far too much, as I argue here). How wage hikes compare to the rate of inflation may well determine if the Bank goes for another rate hike now: ‘We will see if inflation expectations continue to come down and [if] that will be reflected in wage-bargaining,’ he told the Committee. Of course the next monthly inflation data will play a big role, too.

Market expectations remain that rate hikes are not over – though that doesn’t mean they are coming this month. In the words of Bailey, ‘the judgments now are much finer’. But that doesn’t mean the rate saga has come to the end – nor does it give any indication about how long historically normal rates will be maintained.