The Bank of England is likely to provide evidence of tougher times ahead for the economy when it publishes its latest quarterly report on inflation.

The report comes after the UK's annual rate of inflation rose to 4.4% in July, its highest level since 1997.

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Fed hints at no more US rate cuts ... the Bank is likely to predict that inflation could touch 5% before falling back, leaving no scope for an early cut in interest rates.

Jobs data, also due later, is expected to show a rise in those out of work.

Vicky Redwood, an economist at Capital Economics, said it looked possible that inflation could reach 5% this year before easing. She said the Bank's Monetary Policy Committee could also cut its economic growth forecasts for next year.

"While we are in no doubt that the committee will cut interest rates aggressively once inflation has shown signs of peaking it would be understandable if it did not want to signal that rate cuts are imminent just yet," she said.

(BBC)

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