The Bank of England’s Monetary Policy Committee has been meeting and will announce its decision on short term interest rates at lunchtime today. It is probable, but by no means certain, that the decision will be to hike by fifty basis points.

Almost as important as the decision on interest rates will be the release of the Bank’s projections for the economy.

This will provide advance guidance to the markets about the Bank’s expectations for growth and inflation over the rest of the third quarter. The most recent monetary policy summary predicted that inflation could reach 11%, but there is a real possibility that that will be revised upwards, possibly to as high as 15%.

Were that to be the case, the Bank would be certain to continue to raise rates.

That does seem to be an extreme view, particularly with the price of petrol having fallen recently. However, with Ofgem, the energy regulator, stating recently that the estimates for the rise in the energy cap in October are likely to be revised upwards, a further significant rise in inflation should not be discounted.