KATE BARKER, of the Bank of England, said yesterday there would be no overreaction to the recent increase in inflation.
Ms Barker, a Monetary Policy Committee (MPC) member, admitted the current inflation rate of 2.8 per cent was a concern, but said it was important to remember that the figure was lower than it was at the end of last year.
"The question will be, do we need to do anything?" she said.
"What we would not want to do is overreact."
It was perhaps one of the strongest hints yet that the MPC will keep interest rates at 5.25 per cent next month.
Her comments came as minutes from the most recent MPC meeting showed that policymakers voted 8-1 for steady interest rates this month - with David Blanchflower calling for a quarter-point cut.
"This outcome has clearly reduced the likelihood of a near-term rate hike, but we still feel one is more likely than not," said economist James Knightley, of Ing Financial Markets.
Inflation figures on Tuesday showed the Consumer Prices Index hit 2.8 per cent last month - ahead of the two per cent target - despite rate rises last August, November and January.
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