"We are expecting inflation to be well over 4 percent for much of the rest of the year," Gieve said in a prepared statement, adding that, "timely sources of data suggest the economy is already slowing fast."

However, Gieve conceded that slowing growth would be useful in curbing the strong inflation rate.

Gieve emphasized that the central bank's Monetary Policy Committee would do what was needed to bring inflation back to down to the target rate. However, Gieve noted that in deciding the bank rate, tightening credit conditions would also need to be taken into account.

The central banker also suggested credit conditions could worsen in the coming months and that, if the current credit squeeze was the only factor to consider, the MPC would consider cutting rates. However, with inflation rates increasing, the question of a rate hike would have to be raised.

By Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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