The bond markets have already downgraded Britain’s credit rating

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Inflation didn’t rise in November (Xetra: A0Z24E - news) but it didn’t fall either and that’s by far the more significant conclusion of Tuesday’s latest prices data.

The fact that such consumer essentials as gas, electricity and food all rose to outweigh falls in items such as petrol, reveals how sensitive the UK economy remains to rising costs, defying those who predicted a fall in CPI (Other OTC: CPIC - news) in November’s figures. This, despite the economy struggling to catch light and at a time when earnings are rising much more slowly than inflation, so keeping consumer spending in check. The official Bank rate is at 0.5pc, keeping returns on savings negative.

The upshot is that economists fully expect inflation to carry on rising and break through the 3pc level again early next year.

The Bank of England’s Monetary Policy Committee is increasingly less likely to add to its £375bn of quantitative easing (money printing) to try to stimulate the economy. But with employment being the surprise package of the year (for reasons that leave Bank of England economists unsure why) how long can earnings remain subdued? Inflation expectations are rising and earnings growth may have to respond.

During a period of such experimental economic policy as we’re witnessing, this whole mix is becoming quite explosive. Quite how the MPC (KOSDAQ: 050540.KQ - news) would be expected to navigate its way through this and keep prices stable while hitting a nominal GDP figure or specific unemployment rate, as being proposed by Business Secretary Vince Cable and gathering some momentum, is unclear. Clearly it couldn’t and inflation would be the thing to let go of.

Our public finances are already the subject of intense scrutiny, with speculation mounting that our AAA credit rating might be under threat. But the stubborn inflationary pressures in the economy and our extended austerity have not gone unnoticed where it counts most the international bond markets.

While credit rating agencies, such as Standard & Poor’s, consider their next move in relation to our rating, the markets have already given voice to their view of our credit rating. It’s getting worse. The Coalition’s borrowing costs, as revealed by the interest rate it must pay to borrow 10-year money, has risen a third since the start of August, from 1.44pc to 1.94pc now, and looks like heading back through the 2pc level soon. That’s a significant downgrade already.

= Crozier’s G4S (LSE: GFS.L - news) role points to confidence at ITV =

At 257p, G4S shares are still a way off their pre-Olympic (BSE: OLPCL.BO - news) high of 290p. Its role in UK public procurement projects is far from guaranteed, as was recently witnessed by contests to run prisons.

Its chief executive, Nick Buckles, is on strike three and another miss will see him leave. That’s the context of Monday’s board appointments, which represent an improvement in bench strength.

The most eye-catching was Adam Crozier’s appointment . It’s interesting the ITV (LSE: ITV.L - news) chief executive feels he has enough time to help out at G4S having not yet completed three years in the hot seat at ITV. It’s presumably a sign of progress at the broadcaster and the share price reflects that.

ITV’s own chairman, Archie Norman, can be trusted to ensure Crozier won’t be distracted by G4S and that confidence suggests things might be going better at ITV than first thought. Shareholders must hope so anyway.

damian.reece@telegraph.co.uk