As was widely expected, the Bank of England has announced today that interest rates once again will be held at record lows of 0.5 per cent.

But with Britain’s economic recovery gaining seriousmomentum, it is high time that these rates were now raised. Why? Well, because the economic situation demands it and because it will be crucial to the BoE’s long-term credibility.

Almost all the economic data suggests that a rates rise is long overdue.  Taking a look at recent headlines – house prices on average are up by 8 per cent, car sales are up by 11 per cent, unemployment continues to fall, inflation is down, and the British Chamber of Commerce’s just-published Quarter 4 survey of 8,000 firms shows that investments, consumer demand and employment are all on a considerable upward trend.

All this, and more, makes it increasingly difficult for the Bank’s governor, Mark Carney, to justify keeping the rock-bottom rates that have, as I have often highlighted, adversely affected pensioners and savers, amongst others.

The latest decision to hold interest rates where they have been for the last five years, follows the BoE’s pledge last year not to consider raising them until unemployment falls to 7 per cent – and that this, they said, would probably not happen until 2016.

But as we’ve all seen, the rate of unemployment is falling sharply – down to 7.4 per cent in October andnew data revealed next month could show it hit 7 per cent in Q4 – and this is fuelling hopes that the threshold at which the Monetary Policy Committee (MPC) would consider raising interest rates under Carney’s ‘forward guidance’ policy, may come into effect a lot sooner.

When your forecasts turn out to be inaccurate, you need to take ownership of this and change tact – or you will, no doubt, be thrown off course.

I believe that Carney and Bank officials must at their next meeting seriously consider a rate rise.  If theyresolutely stick to their guns and refuse to budge an inch, the BoE’s credibility could suffer, which would create uncertainty for investors, and it would delay sustainable growth.

If he is going to ignore the economic indicators at all costs, as the song goes “there maybe trouble ahead.”