When Tony Blair was first elected as prime minister in 1997 the first thing he and his Chancellor of the Exchequer Gordon Brown did was to grant operational independence to the Bank of England.

The Central Bank has warned that Ireland's efforts to exit the bailout programme could be hampered by the prospect of a sharp slowdown in economic growth or a rise in mortgage arrears.

Last month’s reversal in the UK's VAT reduction saw inflation in Britain leap to 3.5% in January – its highest level since November 2008, official figures revealed today.

A sharper than expected rise in inflation to 3.1% and the subsequent expectation of an interest rate hike in May has sent shockwaves through the London market.