Inflation report to signal next rate move

The Bank of England will publish its quarterly inflation report this week, providing some clues as to the next interest rate move.

Earlier this month, the bank's monetary policy committee (MPC) voted to leave the base rate at 5.75 per cent.

But most commentators expect another increase before the end of the year.

The inflation report, due out on Wednesday, will provide an indication about how hawkish the MPC is feeling and whether another rise can be expected even as early as next month.

Inflation, as measured by the CPI, fell to 2.4 per cent last month.

While this was an improvement, it remains above the Treasury's target of two per cent.

There are fears that with house prices spurred on by demand and the recent floods set to provide a spike in retail spending, short-to-medium-term inflation could rise.

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