The Bank of England has not proven particularly prescient in recent years but might it be that things are different this time around?

Inflation has been enemy number one since the nine members of the Bank's Monetary Policy Committee (MPC) woke from their collective slumber and started raising interest rates in December 2021, when the cost of borrowing money was a meagre 0.1% even though inflation had already reached 5%.

Led by Governor Andrew Bailey the MPC remained true for too long to the mistaken view that rising prices were a "transitory" response to the global economy emerging from pandemic lockdowns, with pressure bound to ease of its own accord. Few will need reminding what resulted from this failure as a subsequent spike in energy prices stoked the cost-of-living crisis to a peak in October 2022 when UK inflation hit 11.1%.

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Interest rate cut: A shot in the arm, or a shot in the dark?

Taking money out of people's pockets via higher interest rates, which leads to larger repayments on mortgages and other borrowing, makes it more expensive to maintain existing debt and therefore discourages consumer and business spending. This method of reducing demand is therefore a classic lever for bringing rising prices under control.

UK economic data due to be released this week is expected to reveal a mix of mounting inflationary pressures, starting today with wage figures that are forecast to show pay growth climbing to 5.9% in the three months to December. That compares to 5.6% in the three months to November and would continue the upward trend from 4.9% in the three........

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