THE partisan nature of the debate about Britain’s exit from the EU means it is very difficult to find impartial assessments of the UK economy.

It tends to be either prospering or constantly on the verge of collapse.

Following last year’s Brexit vote, the Bank of England’s Monetary Policy Committee - with governor Mark Carney at the helm - reduced interest rates and pursued a quantitative easing (QE) programme aimed at supporting the economy.

But in June there was an abrupt change in tone from the Bank, with suggestions that last summer’s interest rate cut might need to be reversed.

This month we saw the release of official figures for retail sales that were better than most had expected.

So should this be seen as adding to the argument that Mr Carney was wrong about reducing rates last year and that the Bank will have to raise interest rates imminently?

While it is true that the UK has gone from being the fastest growing G7 nation to the slowest, the G7 is a somewhat archaic group of countries, growth rates are volatile, and all members are enjoying an expansion.

So this alone probably doesn’t spell the end of UK economic prosperity.

It is also true that higher inflation has squeezed UK consumers’ incomes.

But while inflation has been higher in the UK than elsewhere, the majority of the squeeze on incomes was caused by the recovery in the oil price and can be seen around the world.

The latest data continues to suggest that the UK, while not firing on all cylinders, is holding together reasonably well.

The June inflation number was lower than expected at 2.6 per cent, echoing a trend which we have seen in other economies over the last few months.

That lessens the squeeze on incomes.

In fact, we can see this in the recovery in retail sales – because inflation wasn’t as high as expected consumers were able to buy more than expected.

However, we still don’t think the Bank is anxious to raise interest rates.

Until June, measures of interest rate expectations had shown investors becoming increasingly confident, almost complacent about rates staying on hold.

In that context, the Bank probably felt it was worth reminding the markets that interest rates can rise as well as fall, in order to avoid a big shock if inflation picked up later in the year.

Mark Carney’s predecessor, Sir Mervyn King, called this approach the Maradona theory of interest rates.

This referred to a famous Maradona goal against England, where he beat five English players while running in virtually a straight line.

Maradona was able to clear a straight path towards goal by signalling to the defenders that he might be about to turn.

In the same way, the Bank would rather raise the prospect of an interest rate hike than actually follow through with one.

The market reaction may well mean they now have no need.

But even if interest rates remain on hold, we think the pound has room to rise against other currencies because it currently trades on an attractive valuation.

We thought the euro might be this year’s surprise winner among currencies as 2017 started with too much enthusiasm for Donald Trump’s now collapsed policy agenda, while pessimism about political risk in Europe was also rife.

Sure enough the single currency is up ten per cent against the dollar so far this year.

But we are now less than a year away from the next Italian election, with polls suggesting it will be won by the populist and eurosceptic Five Star Movement.

In fact, we suspect the election will be called within the next six months and this is likely to weigh on the euro.

Unfortunately though, this is unlikely to be in time for Britons’ summer holidays – where the strength of the euro is making holidaying on the continent that bit more expensive.

Neil McLoram works in business development at wealth management firm Brewin Dolphin, based in Newcastle.

The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin. No director, representative or employee of Brewin Dolphin accepts liability for any direct or consequential loss arising from the use of this document or its contents. Any tax allowances or thresholds mentioned are based on personal circumstances and current legislation which is subject to change. The information contained in the Brewin Dolphin Family Wealth Report is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The value of investments can fall and you may get back less than you invested. The information is for illustrative purposes only and is not intended as investment advice.