The Bank of England still needs to “see the job through” meaning interest rate can still go higher as its chief economist called record high inflation a case of “bad luck”.
The BoE’s chief economist, Huw Pill, said that sticky inflation was “largely a manifestation of ‘bad luck’ – a series of unfortunate events” and that the central bank had to be sure prices were coming down before it could stop hiking interest rates.
"On balance the onus remains on ensuring enough monetary tightening is delivered to 'see the job through' and sustainably return inflation to target," Pill said in a speech in Geneva.
The Bank of England’s interest rate is currently at 4.25%, after being hiked last month for the 11th time since the BoE started to increase rates in December 2021.
Pill voted with the majority on the BoE's Monetary Policy Committee last month to raise the interest rate.
Prices rose unexpectedly in the UK last month after three consecutive months of slowing, driven by record food costs.
The Office for National Statistics (ONS) calculated inflation at 10.4% from January's 10.1% although it is still down from a 41-year high of 11.1% in October.
This was the first rise in UK inflation in four months. Economists had forecasted that inflation would fall to 9.9% in February.
"Although headline inflation is set to fall significantly in the course of this year owing to a combination of base effects and falls in energy prices, caution is still needed in assessing inflation prospects on account of the potential persistence of domestically generated inflation," Pill said.
Financial markets see a 70% chance of another quarter-point rate increase at the BoE's next rate decision on May 11.
Watch: Bank of England boss: Inflation 'far too high'