Yesterday, the CBI released its economic forecast for next year. This is what they said about the prospects for inflation:
"The CBI expects inflation throughout 2011 to be higher than previously forecast, reflecting greater inflationary pressure from energy and commodity prices. CPI inflation will significantly exceed the Bank of England’s 2 percent target in 2011 for a second year, mainly due to the impact of higher VAT. This upward push to inflation will end by Q1 2012, when inflation is forecast to dip just below target before ending the year at 2.4 percent."
Time for a rate hike, perhaps?