It never rains but it pours, say some expats used to bad weather and accumulating troubles back home. Here it just pretty much never rains, but the cost-of-living issue is nevertheless a darkening cloud. The topic itself is becoming as well-worn as the cliché, but, crucially, the situation isn't yet improving. In fact, Standard Chartered Bank told us last week that it expects inflation in the UAE to reach 13.8 per cent in 2006, tilting further upwards from the tendency of the past few years.

That makes your fixed dirham deposit rate of four to five per cent a fairly pitiful return. Since the general experience of inflation is well into double digits, it's no wonder people rush into alternative assets. From this perspective, such behaviour is not just speculative venture for gain, but a desperate attempt to hedge against prospective loss of wealth.

For most here, Dubai is a hard-working city, not a cushy posting, in which case having your income usurped by escalating outgoings is especially unwelcome. Add the fact that the dollar (and therefore dirham) has not only fallen out of bed but shows no sign of getting off the floor indeed may trip down the stairs and effective incomes for expats are under pressure. By example, seven dirhams per pound sterling is an unfavourable rate for the resident worker.

Add further the distinct possibility that your next rental hike, or school fee bill, will far exceed your salary adjustment, and your finances may start to look pretty sick. Remember that, according to our survey with YouGov last May, the average pay rise in the previous twelve months was around seven per cent, with 42 per cent of respondents saying they had no rise, or even a cut.

Moreover, for many people, Dubai's five per cent housing fee was added this year to utility bills, equivalent to a municipality tax from the householder's point of view, but paid by the renter rather than the owner. Critically, as rents go up, so does the impact of the charge. Meanwhile, VAT is supposedly lurking in the wings. But even if it were set at only modest levels, it might just be the straw that broke the camel's back, as it were, in terms of living standards.

People can be pleasantly surprised when goods and services in the UAE cost less than in their home countries and there are many such examples, for instance (from a European's perspective) in petrol, and hiring a car. But they really notice when costs are higher, even modestly so. For branded products, you might well expect it, but in everyday items it means a benchmark has been crossed. Our cost-of-living vox pop last week anecdotally confirmed the impression of people submerged financially in a sea of red ink, essentially expats whose earnings are being drawn down.

Call it growing pains, if you like, but inflation in the UAE is not only a challenge for residents but also a gnawing dilemma for the authorities, and a problem without easy solution in the current environment. 2010 cannot come soon enough if that is truly the earliest that a monetary policy independent of the dollar is contemplated. We are having to wait for markets to adjust, for real-estate supply to match demand, while the Government intervenes both directly, such as the rent cap, and indirectly, by promoting greater competition, as in publishing comparative, weekly shopping basket data.

On an international basis, the overall cost comparison might not be so startling if Dubai were a ready-made city, but if you consider it still a work in progress rather than the finished product, and your point of reference is the past, or rival centres in the region, then the competitiveness angle stands out, as the development process seeks to acquire critical mass.

There's another metaphor to share: the darkest hour is just before dawn. It is an idea to cling to as we await a chink of light in the inflationary gloom. Maybe, then, the towers rising rapidly in New Dubai herald the sunrise on a brighter future.