Analysts at the Office for Budget Responsibility have predicted that the Bank of England will most likely hike short-term interest rates once or twice more before calling a halt to their programme of tightening monetary policy, which has lasted for fifteen months and seen rates climb to their highest level for fourteen years.

Rates are therefore unlikely to reach the 5% level which was predicted by market commentators three months ago. With the base rate of interest currently at 4.25%, it is now likely that the Bank will stop at either 4.25% or 4.75%.

It is now considered unlikely that, unless the current turmoil in the financial markets continues or sees further banks face severe liquidity problems, that rates will remain unchanged for the rest of the year,

Catherine Mann, far and away the most hawkish of the four independent members of the Monetary Policy Committee, spoke over the weekend of her view that inflation will recede over the summer and that is why she voted for a smaller hike than she has done over the past few meetings.

She feels that the effect of the recent rate hike is now being seen in the inflation data, and that provided some motivation for her to vote for the twenty-five point hike that was eventually agreed.

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