Are interest rates about to rise? What does it mean for you?
Consumer spending is in the doldrums, the political landscape is in disarray, Brexit hangs in the balance, and the stock market has taken a hammering. So when the Bank of England met to decide what to do with interest rates, the vast majority of the experts expected all but one member to vote to keep rates unchanged. But they were in for a surprise.
In fact, three members of the committee that sets the rate voted to increase it.
See also: What's going on with inflation?
See also: Where to invest after the shock UK election result
The markets were stunned. David Lamb, head of dealing at FEXCO Corporate Payments, says: "No-one had expected such a tectonic shift in the committee's view on interest rates, and the surprise hit the markets like an electric shock."
Will rates rise?
What this means depends on what happens between now and the next meeting - and whether it persuades more members into the 'hawks' camp - supporting rate rises.
On the one hand, we seem to be looking at a consumer slowdown, which would indicate that rates are going nowhere. As Laith Khalaf, Senior Analyst with Hargreaves Lansdown says: "The central bank has itself highlighted weaker consumer spending as a key risk to the UK economy, so now this particular chicken is coming home to roost, it's strange that the Bank of England is thinking about releasing the foxes."
There's also the political situation, which is bound to make things even worse. Michael Metcalfe, global head of macro strategy at State Street Global Markets, said it was "surprising that the hawkish tendencies of the BoE have not been derailed by the return of political uncertainty following the election."
On the other hand, the bank is clearly worried about inflation, which could require a rate rise to keep it in check. Lamb, suggests: "The Bank of England's tolerance of high inflation was always going to be finite – but with consumer prices now rising at 2.9% a year, its tipping point is clearly close at hand."
Alan Wilson, senior investment manager of active fixed income at State Street Global Advisors agrees: "Given the precarious outlook for the domestic economy, the MPC cannot allow inflation to become entrenched."
The market is taking the discussions seriously: the pound rose on the news, and the market is now pricing in a one in three chance of an interest rate rise by the end of the year - from a one in twenty chance before the announcement.
What it means for you
This may be music to the ears of savers, who have faced rock bottom savings rates for years, and for whom this offers a glimmer of hope of a decent return on their savings. Atom Bank has already offered some cheer, with the launch of market leading rates across one, two and five years - at 1.8%, 2% and 2.4%.
For mortgage savers, meanwhile, a small rise in Bank of England rates may not be enough to make a dramatic difference to the mortgage market, but is a salutary reminder that rates can go up as well as down.
For those with fixed incomes and variable mortgages, it could spark a conversation as to whether it's time to consider fixing the mortgage - so you have an element of certainty about what you are paying, regardless of what happens to rates.
Before mortgage holders or savers get too hot under the collar however, Khalafit points out: "The balance of power still rests with the doves in the Monetary Policy Committee", who want to keep rates on hold. Even those who are talking about the possibility of a rise are only looking at whether rates should go back up to 0.5% - which wouldn't necessarily make a dramatic difference to either savers or borrowers.
He adds: "It's worthy of note that expectations of an interest rate rise have been confounded for many years now." It may, therefore, be a case of doing the calculations of what a rise would mean for your finances, making a plan so you know how you would deal with it, and then sitting tight until we have a better idea of what the future holds in store for both the economy and the Bank of England.