"The Bank of England raised short-term interest rates by twenty-five-basis points. This is the first time it has seen fit to hike at consecutive meetings since 2004.

The MPC also warned that inflation is set to climb above 7% Hiking by 0.25% having raised by 0.10% in December, the bank hopes that it has sent a signal to the markets that it is serious about fighting inflation.

At a number of meetings last year, the sentiment of Governor Andrew Bailey’s comments centred around the expectation that the Central bank wanted to remain in control of its own destiny. In that it wanted to be able to withdraw support for the economy at its own pace.

The basic fact remains that as soon as Central banks start intimating that the time to hike is approaching, in all probability they are already too late.

Bailey’s agreement with Fed Chairman Jerome Powell that inflation was simply transitory and would be limited to the supply side of the economy has now returned to bite him. How he must wish he had been firmer in expressing his wishes for the cycle of higher rates to have started last November.

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