If there were any lingering doubts over whether the Bank of England would raise interest rates when the vote takes place at its meeting which concludes later this morning, they were dispelled by the publication of the May inflation report.

Headline inflation was unchanged last month at 8.7% as the continued fall in energy prices was offset by the continued excessive cost of foodstuffs. While a twenty-five-basis point hike in short-term interest rates was virtually certain before the data was released, it is now “baked in”.

The Office for National Statistics, when considering the data and the lack of any change, particularly given that the Bank of England has been raising rates constantly since December 2021, believes that there is little option but to allow the economy to fall into recession as the “nuclear option” to curbing inflation.

While prices are rising across the board, it’s the repricing of fixed-rate mortgages that is having the most effect on the public consciousness. During Prime Minister’s questions in Parliament yesterday, the opposition leader, Sir Kier Starmer, clashed with Rishi Sunak over the Government’s handling of the cost-of-living crisis. However, he was particularly careful to put forward suggestions for what the Labour Party would do if, or more likely when, it comes to power.

When compared to the last time there was a series of concerted interest rate hikes, over two decades ago, there were significantly fewer fixed-rate mortgages than exist today. Therefore, the ability of the Central Bank to affect inflation is “diluted” as the effect of rate hikes is spread over time.

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