Inflation figures fell to 8.7% in the year to April. This was lower than expected and has fuelled speculation that the Bank of England might raise rates as a way of controlling this. The idea is that higher rates discourage consumers from spending, ultimately driving prices down.
“On the MPC* we remain committed to bringing it (inflation) back to our 2 per cent target, and that is what we will do,” said Jonathan Haskel. “Our tool for doing this is interest rates.” (2)