Doth the Old Lady protest too much on rate cuts?

The surge in business insolvencies and slump in M4 money growth suggest that the Bank of England maybe protesting too much when it stressed this week that interest rate cuts are far away. But the Bank probably won’t be comfortable cutting rates until it can be confident that wage growth is heading from 8% now to the rates of 3.0-3.5% consistent with the 2.0% inflation target. Our forecasts suggest that might not happen until late next year.