The Bank of England (BoE) kept interest rates steady at 5.25 per cent today, but financial markets are betting that borrowing costs will still rise in May.
Most economists had predicted the decision to keep rates unchanged for the third month running, but had been on alert for a surprise move after January's shock rise.
Data earlier today, showing house price inflation hit a two-year high and manufacturing output fell at its steepest pace in one-and-a-half years, had only added to the uncertainty over this month's decision.
But most experts are convinced the BoE will raise rates next month by a quarter percentage point for the fourth time since August because policymakers are worried about an increase in firms' pricing power.
Monetary Policy Committee members have appeared more circumspect. They say the outlook for inflation - currently above the 2 per cent target - is highly uncertain, and much will depend on how far utility bills fall later this year after steep increases over 2006.