British interest rates hit a 6-year high of 5.5 per cent today and could rise further still as the Bank of England tries to rein in inflation.
The widely expected quarter-point hike took borrowing costs in Britain higher than in any other country in the Group of Seven rich nations' club. US rates stayed at 5.25 per cent this week. So too did the European Central Bank's, at 3.75 per cent.
Many economists predict the BoE's Monetary Policy Committee, 10 years old this week, will hike again before too long and maybe even as soon as next month.
Explaining its move - the fourth hike since August - the BoE said inflation would probably fall back this year thanks to lower energy bills but capacity constraints meant risks were on the upside further out.
"I would not be surprised if today's interest rate rise to 5.5 per cent is followed by another increase next month," said Roger Bootle, economic adviser to Deloitte. "What's more, interest rates may eventually need to rise to 6 per cent, or even higher."