Interest rates dilemma puts spotlight on Bank of England’s credibility

As markets bet on an increase, economists give their view after Andrew Bailey's mixed messages

• UK bond yields soar as markets brace for interest rate rise

Less than a month ago Andrew Bailey warned the hard yards" were still to come. Britain's economic recovery from Covid-19 was fading, inflationary pressures stalking the country would prove temporary and the Bank of England fiddling with interest rates would hardly produce more lorry drivers or make the wind blow for turbines.

Fast forward and the Bank's governor appears to have changed his tune. Financial markets are betting that a rate increase is due within weeks after comments from Bailey over the weekend did little to dampen frenzied speculation.