Bank of England Chief Economist Huw Pill said on Thursday the central bank would "see the job through" on bringing high inflation back down to the BoE's 2% target, even if there was a risk of raising interest rates too high.
"The key element is that we on the MPC (Monetary Policy Committee) need to see the job through and ensure a lasting and sustainable return of inflation to the 2% target," Pill said in a speech at a research conference organised by the South African Reserve Bank. "At present, the emphasis is still on ensuring that we are - in the words of the MPC's last statement - sufficiently restrictive for sufficiently long to ensure that we have that lasting return to target."
The BoE raised interest rates for the 14th time in a row earlier this month and said borrowing costs were likely to stay high for some time in order to prevent high inflation from turning into a long-term problem for Britain's economy.
Pill said there was a risk that the BoE raises borrowing costs too high.
"Now that policy is in restrictive territory, there is the possibility of doing too much and inflicting unnecessary damage on employment and growth," he said.
But he also said there was no room for complacency and some indicators of underlying inflation pressures had developed less benignly recently than the headline rate of inflation which has fallen from 11.1% in October to 6.8% in July.
The key question for policymakers was the degree to which companies and households try to defend their incomes against the impact of the surge of inflation, Pill said. (Reporting by William Schomberg and Sarah Young in London Editing by Alistair Smout)