Bank of England at forefront of global rates dilemma

London

THE Bank of England will find itself facing a question next week that is set to trouble many other central banks this year: Does an unexpectedly strong global economy mean it should press ahead with raising interest rates?

For the BoE - and its Indian, Australian and New Zealand counterparts - the answer over the next few days is likely to be "no", as domestic uncertainties for now outweigh the inflationary pressure of a powerful global upswing.

But the odds of moves further away from the emergency level stimulus of the financial crisis are shortening. In government bond markets, yields on 10-year US, German and British debt have leapt by more than 30 basis points since the start of the year, and tw…