John Gieve, the deputy governor of the Bank of England, has hinted that he will vote for a base rate rise next week in order to bring inflation back into target.
In a speech to the University of Surrey, Guildford, the Monetary Policy Committee member said the full impact of past increases in interest rates has yet to come through.
However, he added: “I voted for a further increase earlier this month partly because I was not convinced that current rates would be sufficient to bring credit growth and nominal demand back to their long term sustainable path.
“I also felt that the impact of moving too slowly on the credibility of the regime and thus the future prospects for the economy was of greater concern, given the robust rate of growth, than an unnecessary slowdown in activity. “
Gieve told listeners that he would be watching the trends in the growth of credit and money carefully over the next few months.