Gertjan Vlieghe said his expectations of growth and inflation are in line with a gradually rising path of interest rates, in written evidence to the Treasury Select Committee (TSC).
The economy will require one or two quarter base rate rises in the three-year forecast period, he added.
This would take the base rate up to 2% by 2021, from its current level of 0.5%.
It comes as Vlieghe is reappointed as one of nine members of the Bank of England’s Monetary Policy Committee (MPC).
At the most recent committee meeting this month he did not vote to raise rates, but two members of the MPC – Ian McCafferty and Michael Saunders – did.
Vlieghe said his forecast is subject to “significant uncertainty” because of unknowns over how the economy will react to rising rates.
Rates likely to go up in 2018
Bank governor Mark Carney today also told MPs on the Treasury Committee that interest rates are “more likely to go up than not”.
It comes after the MPC held off raising rates in May as economy growth stalled in the first months of 2018.
Carney said it appeared snow and bad weather had dented economic performance, which is likely to result in a rebound in the second quarter.
The chief policymaker added that it was right to hold off a rate rise in May and wait for further economic data.
