Mounting alarm over the surge in UK interest rates and what might yet be to come has been palpable in the last week, as the country’s very particular inflation woes have remained in the spotlight.

The effect on mortgage rates and consequent impact on the housing market have been very much in focus.

On Tuesday, the average interest rate for a five-year, fixed-rate mortgage was 6.01%, according to Moneyfacts.

The gulf in many instances between the cost of fixed-rate mortgages and the much lesser interest which can be earned in easy-access savings accounts has also been attracting attention. The Financial Conduct Authority invited chiefs of the big banks to a meeting this week to explain low savings rates, saying afterwards it wanted to see progress on this front “accelerate”.

READ MORE: Landmark former hotel for sale years after devastating fire

The Treasury had reported on June 28 that the FCA had agreed to “deliver better deals for savers by driving competition, including reporting by the end of July on how the savings market is supporting savers to benefit from higher interest rates”.

UK base rates have surged to 5% from a record low of 0.1% in December 2021. And forecasts of how much further they might go have been increasing, something that will be a major worry to many households and businesses. Financial markets were on Thursday pricing in base rates of 6.5% by early 2024.

Allan Monks, an economist at US investment bank JP Morgan Chase & Co, flagged “two metrics to illustrate how a policy rate closer to 7% might be required”, in a note to clients.

And he warned: “A break in behaviour, or hard landing, looks increasingly likely at some point over the next year if inflation is to be brought under control in the UK.”

Mr Monks noted JP Morgan’s central forecast was that base rates would peak at 5.75% by November, while warning they “could go higher” than this.

There is no doubt, after a very long period in which the setting of interest rates in the UK was not at all controversial, this is a very divisive topic indeed these days.

READ MORE: Ian McConnell: Scotch whisky giant some may not have heard of is huge success story

The Bank of England’s Monetary Policy Committee is split, and the two camps looked entrenched at the June meeting at which UK base rates were raised by a half-point to 5%. Seven MPC members, including Bank Governor Andrew Bailey, voted for the increase. The two MPC members who had previously been voting against increasing rates, Swati Dhingra and Silvana Tenreyro, continued to do so at the June meeting.

There are passionate differences of opinion over what should be happening with rates.

Former MPC member Danny Blanchflower told an event in Glasgow last month that there was a very considerable probability on the basis of the Bank of England’s own forecasts out to 2026 that there would be deflation, and asked: “How can you raise rates with a forecast that says you should be cutting rates? They are out of their minds.”

Mr Bailey is increasingly in the spotlight as the UK’s inflation woe and the surge in interest rates understandably continue to grab the headlines.

He late last month tried to play down the part of Brexit in the UK’s inflation woe.

Reflecting on the labour market situation in the context of the UK’s high inflation rate, Mr Bailey said: “I think more of it is to do with the response to Covid, frankly. We saw people come out of the labour force in Covid, other countries tended to see that reverse more quickly and more strongly than we've seen in the UK."

My column in The Herald on Friday noted industry leaders and companies across a raft of sectors have in contrast highlighted the part which Brexit has played in fuelling the UK’s skills and labour shortages crisis.

Meanwhile, research from the Centre for Economic Performance at the London School of Economics and Political Science, published in May, observed: “The cost of Brexit to each household now stands at £250 when only considering the impacts on food since December 2019. This aggregates up to £6.95 billion overall for UK households.”

READ MORE: Denial after denial from brass-necked Tory arch-Brexiter

Mr Blanchflower, who is Bruce V. Rauner ’78 professor of economics at Dartmouth College in the US and a visiting professor at the University of Glasgow, wrote in The Herald last month: "Sadly, these [interest] rate rises have hardly had any impact at all on inflation - which was caused by supply chain issues after the pandemic, the Ukraine war and Brexit. Brexit and its devastating impact on supply chains, especially for food, is what sets the UK apart from every other country. This can't be fixed by rate rises.”

One thing seems certain on the topic of UK interest rates. There is going to be a great deal more controversy and finger-pointing as the shambles continues.

Some of the fingers should be pointed at the Conservative Brexiters, who have it in their power to improve the situation by moving to rejoin the European single market but will not do so.

Mr Bailey will remain in the spotlight, and his analysis should definitely be challenged where it is found wanting.

Thankfully, there are some bright spots on the business and economic front. My Wednesday column focused on the success of Edrington, which owns The Macallan and Highland Park and is a global heavyweight under the control of a charitable trust.

Late last month, Edrington announced pre-tax profits before exceptional items were £387.7m in the year to March, up 43% on the prior 12 months.

Core revenue, generated from Edrington’s spirit brands, leapt 22% to £1.082 billion, passing £1bn for the first time.

We must keep in mind the positives, against an increasingly grim UK economic backdrop.