Interest rates looked to have peaked with base rates at 4.75 per cent, the Organisation for Economic Co-operation and Development has said.
In its half yearly health check of the global economy, the Paris-based think-tank said Britain was probably running either at or slightly above capacity and this was increasing price pressures.
But the risks to the economy were being alleviated by a slowdown in growth.
"Despite the recent pick-up in inflation, weakening growth prospects suggest that monetary tightening will not be required to maintain inflation close to the two per cent target," the OECD report said.
Inflation was near a sevenyear high of 1.9 per cent in April and the Bank of England has left interest rates unchanged since August.
Commentators have been guessing that the next move could be downwards