The Bank of England policymaker said there is “quite a bit of evidence” there is some further upward pressure on inflation on the horizon, he told Bloomberg.
Mervyn King, governor of the Bank of England, has previously warned inflation could top 5% because of rising inflation expectations and higher commodity prices.
Speaking last month after the spike in CPI to 4.4%, King said there was “a significant risk inflation will exceed 5% in the near term.”
Sentance, who has voted to increase interest rates every month since June, believes the UK is seeing more imported inflation than if the pound was stronger, which is reinforcing “the squeeze on consumer spending.”
He said a boost to the pound from a rate increase would not be an “unwelcome development” in the attempt to curb inflation.
Although CPI growth dropped 0.4% to 4% in March, this figure is still double the BoE’s target.
However, the Monetary Policy Committee has voted to keep interest rates at a record low of 0.5% this month, to aid the economic recovery.
“We’re going to see a further upward move in inflation through the summer” and “there is clearly a risk that inflation goes up to 5% or a bit above,” Sentance told Bloomberg.
He added it is also not surprising to see uneven growth, as the UK economy recovers.
