There is almost no limit to the advice and speculation when it comes to predicting the market. From talk of the inflation rate peaking to the housing market bottoming, there is any number of estimates that the everyday investor can hang his or her hat on.

Analysts look for trends before making predictions so why can’t we, as the everyday investor, do the same and look for the growing trend in analysts’ predictions to find some sort of consensus.

Most analysts are offering a difference of opinion on how long the UK economy can expect the same pressures of increasing inflation, credit squeezing and high energy prices. Some analysts expect some clear air by the end of 2008, others 2009, a few commit to 2010, which is so far ahead for the UK market you could barely call it a commitment at all.

Bank of England governor Mervyn King is confident that the inflation rate will fall back into the two per cent range the government is comfortable with, but he was not so clear on timeframes. There were hints that it wasn’t interest rates that would pull back inflation but higher energy and food prices. This links well with the commodity analysts.

Most analysts of commodities expect oil to start retreating sooner rather than later, and talk of US$200 a barrel has disappeared.

Commodities, because of supply and demand, will be the first indicators of market weakness, which will then probably flow on to inflation.

Most analysts also agree that getting through the crisis facing the global markets, will give investors a much healthier and rewarding market in the future. 

A UK central banker has warned that inflation could rise to four per cent before the end of the year.

Bank of England governor Mervyn King said higher food and energy costs might cause a rapid increase in the inflation rate.

So what will a world be like with inflation near four per cent?

At four per cent the central bank will be forced to play its hand and raise interest rates, not because of strong demand overheating the economy, but because of the cost increasing as supply is strained.

This is a whole new ball game for the central bank and rising interest rates will achieve minimal results for maximum pain to the consumer.

Interest rate rises will be necessary.

But the pain will give momentum to the cry that these rises are based on a flawed model and other, more radical, action was needed.

Some may even suggest price fixing to curb inflation but this is an extreme reaction and will only be considered if inflation starts pushing double figures.

Rest assured that double-figure inflation is unlike; almost impossible as spending has already slowed which has relieved some of the pressure on the supply side of that most basic economic equation.

The concern remains that the UK, along with the global economy, is facing inflationary pressure from ‘necessities’ and demand can only reduce so much before it levels out.

It is any wonder analysts are closely monitoring the commodities markets as any further price increase could just be the catalyst needed to push us over the economic edge we have been dancing with for so long.