The Bank of England has come out today (see chart above) and said that as the economy is recovering a bit quicker than expected, that inflation may increase more than it had previously predicted; All very well couched, as usual.
However, it seems to think inflation is unlikely to go to much more than 2% by 2012 and that interest rates will head to the same level by then.
The BOE has been spectacularly wrong during this recession, keeping interests rates too high; might they have gone gone the other way now?
It is not likely, the high chance of a renewed recession next year is discounted, even when a cursory glance at the banks, quantitative easing and government deficit suggest a very bumpy 2011.
As such UK rates will remain low; don't go rushing to fix your mortgages just yet.