Interest rates might need to rise next year if the recovery continues and inflation gets stickier, a Bank of England policymaker has said.
Michael Saunders, an external member of the bank’s monetary policy committee, said that the economy had probably recovered to pre-pandemic levels of GDP.
The bank is forecasting inflation to peak at 4% before the end of the year, twice its target mandate.
“If the economy continues to recover and inflation shows signs of being more persistent, then it might be right to think of interest rates going up in the next year or so,” he said.
