Bank of England holds rates - but Carney will have to hike soon to avoid credibility crisis

No surprises today.

The Bank of England's Monetary Policy Committee has elected to hold policy. Rates stay at their historic lows, while asset purchases are held at £375bn.

Yet the case for a rate hike is becoming ever stronger. Not necessarily because economic conditions warrant it - but because it's vital for the Bank's credibility.

Having adopted a policy of forward guidance that puts a focus on unemployment falling to seven per cent, the Bank will need to change policy to reflect that it's got it wrong when forecasting jobless numbers.

ONS data showed that unemployment had fallen to 7.4 per cent in August to October period.

"The single-month [unemployment] estimate for October was 6.98 per cent," Henderson economist Simon Ward said.

"The headline three-month rate, therefore, could hit the Bank’s threshold in November or December – at least three years earlier than suggested by its projections in the August Inflation Report."

If the Bank doesn't budge then it's going to be hard for investors to trust what governor Mark Carney has to say going forward.

If his direction becomes meaningless, then we're going to have ever more uncertainty about how Bank policy decisions are made.