David Prosser's Outlook: How HSBC wants you to pay more

The demand by Michael Geoghegan for higher interest rates around the world no doubt makes sense in the context of rising inflation. But the HSBC chief executive's message is presumably not one which many of its mortgage customers would like to see central banks heed.

Nor is Mr Geoghegan's advice particularly sensible. If central banks around the globe were indeed to raise the cost of borrowing sharply, they probably would get on top of inflation more quickly than current policies allow. But the cost of this short-term victory would almost certainly be a much more painful global recession than the slowdown for which we are now headed.

The Bank of England's current view, as expressed in its most recent Inflation Report, is that inflation will spike upwards for much of the remainder of this year before an economic slowdown brings price rises back down towards the 2 per cent target.

Similar debates about the balance between coping with short-term inflation and longer-term growth woes are now taking place around the world.

One certainty in the debate, however, is that a rise in the cost of borrowing would lead to an increase in the numbers of people struggling to cope with the cost of their mortgages – including, presumably, some HSBC home-loan customers. Ironic, given how aggressively the bank has targeted the UK mortgage market in recent weeks, with pricing set at notably more competitive levels than many of its rivals.

An additional certainty is that Mr Geoghegan does not think much of the UK Government's calls for pay-settlement restraint, another anti-inflation weapon. HSBC is expecting some rather vitriolic criticism at Friday's AGM over a new performance-related compensation package for senior board members thought to be worth £120m over the next three years.