The Bank of England is now between a rock and a hard place: inflation has topped 9% -- way above the 2% target mandated by the Treasury. In response, its rulebook says it should lift interest rates -- on top of the four rate rises announced since December -- to damp down growth.

Yet growth has already stalled: the economy stagnated in February, shrank slightly in March and -- with families cutting back on luxuries to pay for food and energy -- looks set to slow sharply over the summer.

With much of the cost-of-living surge driven by supply constraints -- of gas, food, silicon chips and skilled workers -- raising interest rates could knock the economy into a recession, even as the cost-of-living crisis carries on.