Further rates rises 'cannot be ruled out' - Haskel

Further increases to the cost of borrowing "cannot be ruled out", a member of the Bank of England’s rate setting committee warned on Monday.

Writing in The Scotsman, Jonathan Haskel said economic conditions were better than they were at the start of the year, with both inflation and wholesale energy prices off recent peaks.

But inflation remained "much too high", he noted, adding: "On the Monetary Policy Committee, we remain committed to bringing [inflation] back to our 2% target, and that is what we will do. Our too for this this is interest rates."

The MPC has raised the cost of borrowing 12 times since December 2022, to 4.5%, the highest since 2008. But Haskel - an external member of the MPC - argued that while the resulting higher borrowing costs "will be difficult for some people", more hikes were still on the cards.

He said: "We are monitoring indicators of inflation momentum and persistence closely. My own view is that it’s important we continue to lean against the risks of inflation momentum, and therefore that further increases in interest rate cannot be ruled out.

"As difficult as our circumstances are, embedded inflation would be worse."