FOLLOWING the financial crisis in 2008-09, the monetary-policy committee (MPC) of the Bank of England slashed interest rates to 0.5%. The Brexit vote of June 2016 prompted a further cut, to 0.25%. But lately the bank has taken a hawkish turn. It reversed the post-Brexit cut in November. And traders see more than a 90% chance that, when the MPC meets on August 2nd, it will raise rates once again.

Members of the MPC have become more hawkish largely because they are more pessimistic about productivity growth. In plain English, the worry is that the economy is only able to increase its production of goods and services by a very small amount—perhaps 1.5%—each year. As a result, even small increases in the amount of demand in the economy will result in enough extra competition for scarce resources to push price inflation above the bank’s 2% target.

Survey data suggest that GDP is growing by about 1.6% a year. A survey of manufacturing on July 24th suggested that output was growing healthily. The latest retail-sales figures were encouraging. On the bank’s logic, at this rate of economic growth price pressures are sure to emerge soon. Increasing interest rates would make saving more rewarding and borrowing costlier, reducing demand.

Yet the case for tighter monetary policy is weaker than it looks. The MPC may be too pessimistic about productivity. In a recent blog post, two of the bank’s “agents”, who speak to firms all over the country, “detect a change in the mindset of business leaders recently, in favour of capital over labour”. More firms in industries such as packaging and meat-processing seem to be investing in robots, the blog argues. That may ultimately feed into higher productivity growth.

In any case, so far there is little evidence of growing price pressure. At 2.4%, inflation is above target—yet that reflects the effects of the depreciation of the pound following the Brexit referendum. Inflation in the service sector, largely generated by domestic activity because fewer services than goods are traded, has been falling in the past year. Unemployment is low, but for the past two months wage growth has fallen.

The economy will need higher rates at some point. But pulling the trigger now would have drawbacks. Households seemed to react badly to the rate rise in November, sharply pulling back on spending. Lately Brexit uncertainty has jumped. It seems needlessly risky to shake up monetary policy too.