The Bank of England will have to raise interest rates to at least 6 per cent to curb soaring inflation, several of its former rate-setters have warned.
Official data published this week showed core inflation in the UK economy, which strips out volatile food and energy prices, increased to its highest level in 31 years to 6.8 per cent in April.
It prompted investors to price in another percentage point rise in bank rate to 5.5 per cent, a high not seen since before the 2008 financial crisis. The markets also suggest interest rates have a one in three chance of climbing to 5.75 per cent by the end of the year. The Bank rate currently sits at 4.5 per cent.