Try and try as they might, the monetary policy architects at the Bank of England are looking increasingly powerless when it comes to taming the beast of inflation.

The latest figures released on Wednesday were an absolute shocker, with May’s headline rate remaining stubbornly unchanged at 8.7% despite expectations that it would fall to around 8.4%. The impact of this miscalculation was such that Prime Minister Rishi Sunak was forced to soften his fervent promise to cut price growth in half by the end of this year, conceding on Thursday that the task is “hard but not impossible”.

The BoE’s Monetary Policy Committee (MPC) has operated independently of the UK Government since 1997 and though Mr Sunak has backed down from last year’s push to gain “intervention power” over the UK’s financial regulators, including the Bank, Governor Andrew Bailey will be acutely aware that the MPC appears more vulnerable having lost control over the process of managing inflation.

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The biggest concern among Wednesday’s data from the Office for National Statistics was the surge in core inflation, which strips out factors like food and energy prices to get a clearer picture of what’s happening domestically.

The increase from 6.8% to 7.1% was driven in large part by the services sector, where inflation was up by 7.4%. By contrast the rate of price increases for food and energy – while still at elevated levels – eased, meaning that inflation is mutating from an imported problem into a home-grown dilemma.

With the MPC’s credibility under fire following a series of policy and forecasting errors, it wasn’t much of a surprise when it was announced on Thursday that Mr Bailey and six of his fellow committee members voted to double down on raising interest rates with an increase of 50 basis points, signalling further pain for homeowners and businesses.

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The two who voted to keep rates on hold at 4.5%, Swati Dhingra and Silvana Tenreyro, justified their decision in part on the “lagging effect” of monetary policy as base rate hikes often take time to feed through into the real economy: “Recent substantial increases in market yields would accentuate this, as they would mainly affect inflation in late 2024 and beyond, by which point energy price falls from their peaks and past rate rises would have lowered inflation significantly,” according to the summary of their reasoning.

Interest rates are a tool for managing inflation, not a magic wand. In addition, current inflationary pressures are not the result of a traditional spike in consumption fuelled by consumer debt, but rather a more unique combination of economic circumstances.

Trade barriers with the EU are loading extra costs onto UK businesses, while the persistently tight labour market is forcing firms to bid higher and higher to secure the staff they need. These are the issues that must be addressed, and they won’t be solved by pushing the interest rate lever.

There is a real risk on this current course that the economy could yet sink into recession. According to the trade association UK Finance, more than 80% of outstanding residential mortgages are on a fixed-rate deal, meaning that the run of interest rate rises since December 2021 has yet to have any impact on those household budgets. By the time they do, it could prove a case of too much, too late.