I expect we will see another cut in interest rates, along with more quantitative easing, but that this will not necessarily happen this month.
While there have been arguments that a further reduction in interest rates will not make a great deal of difference for borrowers who are not on trackers or cheap SVRs linked to base rate and will have a negative impact on hard-hit savers, it would convey an important message.
It would be a real message of intent, showing that the Bank of England is doing all it can to improve the economy, which is in a dire state.
The biggest challenge is the eurozone. The problems there haven’t gone away, with politicians continuing to apply sticking plasters rather than finding a workable, long-term solution.
It has been said that if the single currency collapsed, there would be absolute chaos for five years.
Well, if this decision had been taken three years ago, when it should have been, we would be more than halfway through this chaos. Instead, politicians keep papering over the cracks, which means the problems keep coming back to haunt them.
With strikes in Greece and protests in Madrid, Europe remains our biggest concern.
It affects UK banks with exposure to the eurozone, and their willingness to lend.
Yet while the picture in the eurozone is bleak, closer to home there is more positive news.
In its Credit Conditions Survey, the Bank of England said overall availability of secured credit to households increased significantly in the past quarter, which came as a surprise when expectations were of little change.
But the Bank noted that most of the deals were aimed at those with sizeable deposits and worryingly, that credit scoring had also tightened over the quarter.
This ‘significant’ increase may mean that the Funding for Lending scheme, launched in August, is starting to free up the flow of credit to individuals and businesses.
If this is the case, this should only be the beginning with a further improvement in these numbers in coming months.
But what is really important is that more lending is done to those requiring 90 or even 95 per cent LTV, not further assistance for those with a hefty deposit to put down. They already have access to the best rates.
There was also encouraging news on the high street with the CBI reporting that retailers saw a small increase in sales in September, following a poor August as consumers were glued to their televisions watching the Olympics, rather than hitting the high street.
Some 33 per cent of retailers saw sales rise in September, while 27 per cent saw a fall.
The CBI also said that retailers expected to see a further increase in demand in October.
The picture isn’t all bleak but much more needs to be done. Until then, it’s a hold for rates with quite possibly a further cut and more QE before the end of the year.