This warning follows a recent MPC decision to lower the Bank Rate to 4.25%, a vote which itself revealed divisions, with two members favouring a larger 0.50 percentage point cut and others advocating for rates to be held steady.

Speaking at a King’s Business School conference, three MPC members voiced significant concerns about the upside risks of inflation. Deputy Governor Clare Lombardelli identified high wage growth, currently at 5.9% annually, as a “key driver” of underlying inflation, suggesting it was too elevated to be consistent with the bank’s inflation target and could lead to “second-round effects”. She indicated that while monetary policy at 4.25% is restrictive, caution remains appropriate, City AM reports.

Megan Greene, considered one of the MPC’s more hawkish members, argued that inflation could not be dismissed as “transitory” given public expectations of rising prices. Catherine Mann, who voted to hold interest rates at the last meeting, highlighted the risk posed by volatility in these public price expectations.

Despite Ms Lombardelli and Ms Greene having voted for the recent quarter-point cut, their subsequent commentary, alongside Ms Mann’s cautious stance, suggests a strong concern within the MPC that persistent inflationary pressures may slow the pace of any future rate-cutting cycle.