The Bank of England is facing a dilemma as to how much more money it should raise interest rates because Britain's economy is struggling under the strain of double-digit inflation and a possible recession.
The BoE has raised borrowing costs five times since December, and the next scheduled rates announcement is on August 4.
If inflation pressures become more persistent, the central bank will act forcefully - in other words, increase rates more steeply. It expects to see almost no economic growth over the next three years.
Below is a summary of the conflicting challenges facing BoE Governor Andrew Bailey and his colleagues and finance minister Rishi Sunak.
Consumer prices went up by 9.1% in the last 12 months to May, the most in 40 years, and the BoE predicts that inflation will top 11% in October when energy bills go up again.
The BoE believes that there is little that can be done to stop inflation in the short term, and its priority is to stop the jump in prices from pushing up longer-term inflation expectations, which would make the problem much harder to fix.
One of the most widely watched measures of inflation expectations - the Citi YouGov poll in recent months - has shown signs of stabilising or falling.
Workers' salaries have been growing faster than usual because of one-off bonuses paid by employers in an effort to retain and recruit staff amid a shortage of candidates to fill vacancies.
Total pay, which includes bonuses, increased by almost 7% in the last three months to April, up from about 3% before the COVID-19 epidemic. Regular pay has increased by more than 4%.
Both measures are lagging behind inflation, a cut in the real income of most workers.
Annual pay rises agreed at British workplaces are steady at a historically high rate, according to separate figures from XpertHR, a pay and personnel data publisher.
A combination of the pandemic and the upcoming Brexit has left Britain's employers in many sectors facing a shortage of staff, another worry for the BoE as this adds to pressures.
The official measure of vacancies has hit record highs month after month, although the pace of increases has slowed, one of several signs that the inflationary heat in the jobs market has started to cool.
The BoE is watching how many people are outside the jobs market. The inactivity rate has gone down, leading to the first rise in the headline unemployment rate since late 2020 in the most recent figures, possibly easing inflation pressure in the jobs market.
A jump in inflation would reflect strong growth in the economy, but not this time.
After the coronaviruses lockdowns, prices were already rising around the world, and Russia's invasion of Ukraine has added to the problem by pushing up energy and food prices further.
The economy of Britain contracted in April and March and showed zero growth in February, the first time since the start of the epidemic that it didn't grow in a three-month period. It is about 5% less than the size it would have been had the epidemic happen.
Things are set to get worse, according to the Organisation for Economic Co-operation and Development, which predicts Britain will show zero economic growth in 2023, the weakest performance of all its member countries, bar sanctions-hit Russia.
Finance Minister Sunak increased the government's support for households struggling with the rising cost of living in May, and he is under pressure to do more later this year.