The days of lower interest rates are numbered.  The inflation beast has been ignored too long and it is going on a rampage.

The booming markets such as China and India are suffering under high inflation the most.  China’s inflation rate is maintaining levels at more than 8 per cent.

And despite the US data yesterday showing that inflation was rising slower than expected, the country is in a period of sharp economic downturn when inflation rates are expected to be under downward pressure.

The upward pressure on inflation is a worldwide phenomenon which could end the era of low interest rates.

In Japan the inflation rate is continuing to push up to levels that could cause a inflationary crisis.

Many economies are starting to question if interest rate management is an effective tool in the fight against inflation.  Considering that small changes have a strong and immediate impact on households with debt but such a delayed and relatively minimal impact on inflation. 

Inflation seems to be moving independently of other economic activity, and the question that many governments are asking their central banks is short of price fixing and wage freezing is there a more effective way of reducing inflation in the economy.

It is a question that may need answering as the Bank of England warns that inflation pressure continues to rise because of the cost of food and energy.

Early this week the UK central bank governor, Mervyn King, said slow growth and rising inflation requires delicate balance from the central bank.

“The monetary policy committee is facing its most difficult challenge yet,” Mr King said.

“We are traveling along a bumpy road as the economy rebalances,” he said.

A record number of households are having serious difficulty keeping up with debt repayments, according to the Daily Telegraph.

And no wonder – between us, the paper says, we owe more money than the UK’s entire economy generates in a year.

Add together outstanding mortgages, loan, credit card and higher purchase balances plus other forms of debt and it comes to a whopping £1,345 billion.

Meanwhile, our annual economic output stands at just £1,330 billion.

Apparently, we owe more per head in relation to our income than the Americans, Japanese or Germans.

So it’s no surprise to learn that around 2.5 million people describe themselves as “very concerned” about their ability to manage their debts.

Frankly, I’m amazed that figure isn’t a lot higher.

But there may be a chink of light amid all this gloom.

Mortgage company mform.co.uk says the rates at which mortgage lenders borrow in the money markets to support their fixed-rate deals fell last week, and it thinks this could be the beginning of a new downward trend.

The Nationwide and West Bromwich building societies have now reduced their rates on some fixed-interest deals.

Fingers crossed the desire not to be left looking uncompetitive will encourage other lenders to follow their example.

Here’s a nifty little tool to help you keep your finances on track – and it’s free.

The Yorkshire Building Society is offering anyone who wants it a budget planner they can download to their PC or Mac.

According to the Yorkshire, while it’s more sophisticated than other free planners, which generally provide just a financial snapshot, it’s less complicated than most similar paid-for tools.

You personalise it to fit your spending pattern and use it to monitor your income and expenditure.

You don’t have to be a member to access the software, installation takes seconds – and it could prevent any more nasty end-of-the-month financial surprises.

So what are you waiting for?

Just head to www.ybs.co.uk/budgetplanner and press that download button.

I’ve already installed mine!

Apparently we Brits have wasted £169 billion on stuff we don’t need and won’t ever use.

According to Abbey, that ranges from clothes and shoes that never emerge from the wardrobe to china and gadgets that spend their lives in the cupboard.

I’d like to add another category of useless purchase to that list: extended warranties on electrical goods.

We moved into a new house just over a year ago and it came complete with kitchen appliances.

The guarantees have now run out, prompting manufacturer Whirlpool to make the generous offer of another 12 months of cover for a total of just £245.

That’s one offer I think I can refuse, especially since consumer organisation Which? has found that most electrical goods that fail before the end of their expected life do so within the first few months.

If we all thought twice before splashing our cash on daft purchases – whether it’s ill-fitting stilettos or an extended warranty – just think of the all the money we’d save.

Money we could use to clear expensive debts, or that stashed in a tax-free mini cash Isa (individual savings account) could grow into a valuable nest egg.