Bank of England Chief Economist Andy Haldane gave an entertaining but hard-to-decode speech, which may have hinted at an early interest rate rise as he indicated how the Monetary Policy Committee (MPC) felt the decision between an early or late rate rise were "equally justifiable".
In a speech given in the cricket-loving Yorkshire town of Scarborough and embargoed until late on Wednesday, new MPC member Haldane likened the decision by the committee about when to raise interest rates to a batsman opting to play an attacking or defensive shot.
He assured that there was a current consensus at the MPC on three key elements of monetary strategy: "that any rate rise need not be immediate, that when rate rises come they are intended to be gradual, and that interest rates in the medium-term are likely to be somewhat lower than their historical average".
But as to the timing of the first rise, he said the UK economy had bowled the MPC a delivery that was pitched right in the infamous 'corridor of uncertainty', a term coined by former England defensive stalwart Geoffrey Boycott that refers to a ball that leaves the batsman in two minds.
This, he argued, was similar to the dilemma facing the MPC: "Should monetary policy hold back until key sources of uncertainty about the economy have been resolved? Or instead push forward to prevent leaving it too late?"
Haldane, who attended his first MPC meeting earlier this month, acknowledged that market expectations of a first interest rate rise had jumped forward to the end of this year.
While this prospect sends "shivers down some spines", he admitted, switching to a medical theme, he stressed that any rise will come because the economy had strengthened enough to benefit from such "smaller doses of monetary medicine".
Haldane said there were statistical riddles that made the policy decision so difficult. These included wide GDP forecast revisions, the Bank's consistent over-predictions of productivity, evidence from the US of falling residential home sales as part of the 'taper tantrum', and the fact that interest rates have never previously been this low and so nullifying economists' normal recourse to historical comparisons.
"The most extraordinary dose of monetary medicine perhaps ever-witnessed has been administered to a patient now whistling their way around the hospital ward. An over-reaction to the drugs cannot be ruled out."
Avoiding the raft of potential adverse outcomes was a principal concern of the committee and had resulted in "positively Boytott-ian" defensive monetary policy.
He concluded that the choice over timing was a difficult one as for a batsman facing a difficult choice during a game: "the coaching manual no longer offers a clear guide. Two strategies are equally justifiable."
Concluding, Haldane compared current England batsmen Joe Root and Ian Bell. Root stays back and, like a dove, gets a better read before playing his shot. Bell, a hawk if he were on the MPC, plays forward early and avoids risk of having to react wildly.
Haldane pointed out that cricket statistics are more reliable indicators than economic ones, but that Bell's batting average was only slightly ahead of Root's.
"In other words, it is a close run thing with the odds at present slightly favouring the front foot. But a good run of scores from either player could easily tilt the balance. That, in a nutshell, is where the MPC finds itself today."