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Inflation is climbing again – and will climb further next year. One month’s figures are only one month’s figures, but the rise in the Consumer Prices Index (CPI) in November to 2.6 per cent has scuppered any remaining chance that the Bank of England might cut interest rates tomorrow.

If owner-occupied housing costs are factored in, as in the CPIH, inflation is also rising, at 3.5 per cent. As for longer term rates, the yield on 10-year gilts rose well above 4.5 per cent to the highest it has been this year.

The most troubling aspect of the inflation numbers is that there is no sign of any let-up in the months ahead. This is partly because of Government policy – the rise in tobacco duties, for instance, pushed up the index for November. Putting VAT on private school fees will increase the index in January, and the rise in vehicle excise duties will show through in April. The fact that many contracts are linked to the Retail Prices Index, up 3.6 per cent in November, will add further pressure.

But the strongest driver of inflation will be what happens to service sector prices. They are rising by 5 per cent a year. The service sector is huge and labour intensive. So the latest pay figures showing that average wages are up 5 per cent year on year will make it very hard for that chunk of the economy to hold prices down in 2025.

One forecaster, Pantheon Macroeconomics, estimates that the CPI will hit 3.1 per cent in April and stay at or above 3 per cent through to October. If that happens, the pressure will be on the Bank to slow down any cuts........

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