Bank of England rate increase ‘sooner than expected’

British interest rates may rise sooner than many people expect if inflation rebounds strongly after its recent sharp fall, Bank of England rate-setter Kristin Forbes said yesterday.

Monetary Policy Committee member Forbes said she saw a “higher probability” of scenarios in which inflation falls further in the next few quarters before picking up more strongly than predicted.

“These scenarios, if they occur, would imply an earlier increase in interest rates than expected, especially in order to ensure that any subsequent interest rate increases are slow and gradual,” she said.