Sound bites: BOE wants to normalise policy as soon as it can

The Bank of England is in an enviable position. The economic outlook remains stable and it can afford to pick its moment to strike with tighter policy when it likes. The time is not ripe for higher rates just yet, but it may come sooner than the market is expecting. The UK recovery is showing the best economic comeback in the G7. The inflation outlook remains well balanced, with the headline rate only just dipping below target. Employment conditions are improving. And sterling is gaining a firmer foothold given its recent safe haven appeal. There is a very good chance that the Bank will be aiming to start the ascent to higher rates by mid-year. UK monetary policy has been travelling off-road for too long and the Bank wants to get policy back onto the planned route as soon as it can. The economy is providing all the right sat nav signals to normalise rates as soon as it deems it is ready to go.