MPC’s rates dilemma: protect the recovery or tackle inflation?

Soaring prices will have some at the Bank itching to put up interest rates, but others will stress that now is a very bad time

Economic growth is losing steam and inflation is heading for boiling point. When the Bank of England's rate-setters meet this week, there will be contrasting warning signs to consider.

With the most severe disruption to company supply chains since the 1970s, the recovery from last winter's lockdown is practically stalling. Companies are struggling to recruit staff to keep the tills ringing, raw material costs have surged, and energy prices have hit record highs. All of this threatens to feed into higher inflation this autumn, after the consumer prices measure of annual inflation made a record jump in August, to 3.2%.