Mark Carney’s been agonising about raising interest rates for a year now. Does the Governor of the Bank of England believe Labour’s got a point when it refers to the cost of living crisis? Does Mr Carney fear that any increase in mortgage rates will be too much for the fragile position of consumers who’ve not had a decent pay rise for years? If Carney believes Ed Miliband is on to something then maybe voters will ask themselves that crucial question next May: Do I feel better off?


I still think David Cameron will be returned as leader of the largest party because this week’s figures show we are now on a sustained path of growth but the honeymoon is over for Mark Carney. He’s beginning to gain a reputation as a ditherer, sending out contradictory messages on when he will raise interest rates.


A year ago Carney’s “forward guidance” was that 7% unemployment was to be the trigger for interest rates to rise. This week unemployment fell to 6.4% down 437,000 in the last year. That’s the biggest fall in unemployment in 25 years. The fall is across the board with the number of long term and young people out of work falling too, yet there is no prospect of an interest rate rise this year. There are fears that if the 0.5% rate is held too long and inflation kicks off, the rise might have to be sharp and damaging to the economy.


It looks as if the failure of wage growth is really worrying the Bank of England. Labour hammers out its message that the average household is £1600 worse off than in 2010. Ronald Reagan defeated Jimmy Carter in 1980 by asking people that simple question about whether they were better off under President Carter. The question is now associated with an almost mythical potency to win elections.


Labour points to inflation running at 1.9% with pay increases at 0.6%, the lowest since 2001 when records began. How then has consumer spending recovered if people are being squeezed between paltry pay rises and continuing, if modest, inflation?


Some experts point to the growth in house prices which is now beginning to filter through to the north from London. The government’s help to buy scheme may be indirectly driving consumer spending. What happens when the bubble bursts?


So as we take our August holidays we have to make an assessment of who’s message is getting across. Labour’s cost of living crisis or the government’s view. That is that they have turned round the economy and protected the worst off by raising the income tax threshold, frozen fuel prices and acted on council tax and energy bills.