When inflation failed to move lower into single digit figures this week, the prospects for higher interest rates were a near certainty. The degree of the inflation rise to 10.4% was probably enough  for the Monetary Policy Committee (MPC) to raise rates by 0.5% and create some serious politically negative headlines, but for now a 0.25% raise is their decision. There may be a further 0.25% interest rate hike in the inflationary war chest if inflation continues its upward path, rather than beginning the long Government forecasted journey back to 2.9% in the next 9 months.

However, the current base rate of 4.25% is expected to be the top and in the next 12 months should ease by about 1%, once energy prices start to fall as expected.