It’s Super Thursday: get ready for the first British interest-rate rise in ten years

Yawn.

The Federal Reserve announced its latest decision on US interest rates last night. It did very little. The big meeting comes next month. That's when everyone expects US interest rates to rise again.

But central bank firework aficionados need not despair. Because at lunchtime, "Super Thursday" kicks off!

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The Bank of England's Mark Carney and chums step up and deliver a rate decision, the meeting minutes, and a quarterly inflation forecast, all in one dollop of monetary policy goodness.

I don't know about you, but I can scarcely contain myself...

Thursday's super, thanks for asking

The last time such a momentous occasion occurred was in July 2007, when rates were lifted by a quarter point to 5.75%. So anyone who got their first job in the last ten years has only ever experienced a financial environment in which the Bank of England rate went down.

That's quite something when you think about it.

On the other hand, the move today is widely expected. So it shouldn't come as too much of a shock to all the rate rise newbies. The panicking and the screaming will come at a future date when we get a proper tipping point, but that's all fun for another day.

So what can we expect this afternoon? First things first, I may be being presumptuous with the view that the Bank will definitely raise rates. However, I wouldn't be the only one. Markets are currently pricing in an 88% chance of a rate hike today, noted Kathleen Brooks of City Index.

So if the Bank doesn't act, you have to expect sterling to crater.

However, that seems unlikely. Central banks generally don't like to surprise markets unless they're doing it deliberately. (European Central Bank boss Mario Draghi is probably the best at this, partly from necessity). The mood music out of the Bank has been so explicit that unless it in fact secretly wants the pound to get weaker, it's hard to see it keeping rates on hold at 0.25%. Equally, if sterling falls, that would drive inflation even higher from here, which is rather against the point.

So I think rates are very likely to rise, and it'll be a real shocker if they don't. The biggest question this afternoon is more a case of what happens next?

"We're raising rates #despiteBrexit"

They can argue that the time of imminent danger has passed. They can save face by claiming that the rate cut was necessary at the time to prevent the collapse of human civilisation as we know it. (This is the best thing about economics in the real world there are no counterfactuals or control groups to prove you definitively wrong, so you can basically say what you like.)

And when Mark Carney stands up to talk at 12:30, he can do a "more in sorrow than in anger" headshake at all the long-term damage that he still believes will be done to the economy, and then simultaneously wash his hands of responsibility for actually doing anything about that. (He might be running Canada by that point in any case).

In short, here's what I'd expect: a quarter-point rate rise to 0.5%. A lot of hedged commentary designed to give the impression that another rate hike could be a long way off. An inflation report that downplays the idea of any major risks to inflation, and plays up concerns about growth. And a general sense that this could be a "one and done"-style rise.

This is pretty much the consensus view. It'll probably leave the pound wobbly but not poleaxed. Anything much more hawkish than this will probably send the pound a good bit higher at least until the next Brexit rumour arrives.

As far as what it means for your money goes: most people are on fixed-rate mortgages these days, so the immediate effect on housing costs is unlikely to be dramatic. In fact, as Reuters reports, fewer than 30% of households even have a mortgage these days (it was more than 40% 10 years ago). On top of that, "a record-low 40% of those mortgages are variable rate, down from 70% in 2001", according to Nationwide.

However, if the Bank is less dovish than I expect, then we could certainly see longer-term interest rates perk up a little. That in turn could push up the cost of new home loans. And if nothing else, it is also likely to put even more pressure on the one property market contingent that still uses a lot of interest-only loans the buy-to-let landlords.

Don't get me wrong we're not looking at a big shift here, and I can't see it moving the dial on house prices immediately. But even the prospect of higher rates and the reminder that they can go up as well as down might cause potential home-buyers to think twice. And with the rental sector already fragile, we could see more amateur property moguls throwing in the towel.

Put it this way all else being equal, rising rates are not bullish for house prices. Not that this is a bad thing, as I believe I've mentioned several times before.