Published by Mark Smith-HalvorsenThe cost of importing goods has risen considerably in the last year as the pound has slumped 27 per cent on foreign currency markets.Now, argues Edmund Conway, economics editor of the Telegraph, the weakness of the pound seems certain to produce an inflationary cycle, and the Monetary Policy Committee will need to look seriously at raising interest rates and cutting quantitative easing.To support his claim, Mr Conway pointed to a sharp rise in the purchase of ten-year gilts following yesterday's announcement from the Office for National Statistics stating that inflation had leapt from 1.9 per cent to 2.9 per cent, an unprecedented jump."A higher level indicates, among other things, that the market is starting to get worried about future inflation, and hence the level of future interest rates," he declared.Elsewhere, Bloomberg has revealed technical data suggesting that the pound will continue to weaken against the euro in the coming weeks, with at least four market analysis instruments suggesting a move towards parity.For more information on international payments, visit our Smart FX site