THERE has been much prevarication from the Bank of England over the need to raise interest rates, with three members of its Monetary Policy Committee voting for a rise in June, up from just one in May.

Though this had fallen back to two at the beginning of this month, members including Bank governor Mark Carney and chief economist Andy Haldane have indicated that they will favour a rise in the near future, with the first quarter of 2018 widely seen as the point at which the tide will finally turn.

For Bruce Stout, manager of the Murray International investment trust, this is too little too late, though, with any rise coming now that UK consumers have loaded themselves up with cheap debt likely to lead directly to a recession.

This is because, he said, “we are in a ridiculous situation with negative real interest rates, an escalation in debt - worse than 10 years ago - expanding asset price inflation, particularly in housing, and a diminishing savings base”.

Even a small interest rate rise in this kind of environment would immediately put the brakes on consumer spending, which is currently propping up the fragile UK economy.

With Mr Stout noting that “you can make people borrow or you can make businesses invest” in order to stimulate the economy - and with businesses unlikely to start spending until the colour of Brexit becomes clear - it looks like his prediction of a recession could be correct.

The problem is, with rising inflation on the one hand and the spectre of a recession on the other, what choice does the Bank really have?