By the end of today, the value of your house will have gone up by £50. The bad news is that your mortgage bill looks certain to rise again next week.

Today’s startling figures from the Nationwide, showing annual house price growth of 11.1 per cent, shocked economists and pushed sterling to a two-month high against the dollar as traders bet heavily on a rate rise next Thursday.

An increase to 5.75 per cent is as sure as any punt in the City can be. Four members of the Bank of England’s Monetary Policy Committee wanted higher rates this month, and Mervyn King, the governor, today reiterated his commitment to tackling inflation.

The key question is what happens after next week.

Short-sterling markets suggest there is a 40 per cent chance of rates reaching 6.25 per cent by next March.

But Nationwide insists that the housing market will soften and more worrying for the MPC will be signs that the four interest rate rises so far are beginning to hit the rest of the economy.

Retail figures out yesterday indicated that high-street sales are at their lowest level since November. If business output slips, 5.75 per cent could still be the top of the rate cycle.

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