Bank of England governor Andrew Bailey has warned of higher-than-expected rises in interest rates to help curb high inflationary pressures.

The UK central bank has already hiked interest rates at each of its last seven meetings, with the bank rate currently at 2.25%, but it is clear that they are set to rise further when the Bank’s monetary policy committee next meets to determine rates on 3 November.

Bailey, speaking in Washington, said: [the Bank] “will not hesitate to raise interest rates to meet the inflation target”.

“And, as things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August.”

The markets are anticipating a 75 basis points rise, taking the base rate from 2.25% to 3%, though Mr Bailey’s comments may point to a full 100 basis points rise.

Bailey hopes that the action being taken should cap inflation at around 11%, leading to a more rapid fall in inflation back towards target.

Addressing the annual International Banking Seminar, Bailey added: “UK financial markets have experienced some violent moves in the last few weeks particularly at the long-end of the government debt market.

“This has put the spotlight on flaws in the strategy and structure of one important part of a lot of pension funds.

“The Bank of England has had to intervene to deal with a threat to the stability of the financial system, our other core objective.

“There may appear to be a tension here between tightening monetary policy as we must, including so-called Quantitative Tightening, and buying government debt to ease a critical threat to financial stability.

“This explains why we have been clear that our interventions are strictly temporary, and have been designed to do the minimum necessary.”

‘Significant’ rate hike needed in November, warns Bank of England chief economist