The Bank of England has hinted it is prepared to ramp up interest rates in response to the recent slump in the value of the pound.
Its chief economist said the Bank will have to deliver a "significant monetary policy response" to protect sterling.
Some economists predicted that the Bank of England might call an emergency meeting as soon as this week to raise rates, to help stem the fall in sterling and keep a lid on the rising cost of living.The rate increase seen this month was the seventh in a row and took rates to the highest for 14 years. A further rise would increase monthly mortgage costs for millions of homeowners.
"It is hard not to draw the conclusion that this will require a significant monetary policy response." Huw Pill confirmed that borrowers will pay a hefty price for the government's £45bn mini-budget spree. Mr Pill acknowledged that policymakers ability to reassure markets depends on the "essential stability and credibility" of the UK's macroeconomic framework.
Mr Pill also said that the recent announcement by the Treasury on a further fiscal event in November, alongside new economic forecasts from the OBR was "helpful".
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