MPC member repeats call for rate rise

Mr Sentance – who has unsuccessfully voted for a hike four months running – also said that embarking on a gradual tightening of policy now would help to reduce the shock to confidence of an abrupt rise in interest rates later.

"Since the 1990s we have had a framework for setting interest rates which has built confidence that low and stable inflation will be maintained," Mr Sentance wrote in an article for the Times.

"This confidence must not be eroded by a perception that the MPC is becoming more tolerant of higher inflation."

He noted that inflation – currently 3.1 per cent – had been above the central bank's 2 per cent target for much of the last five years, and he said that a planned rise in value added tax in January would keep inflation above target in 2011 as well.

"The credibility of the MPC's commitment to keeping inflation on target risks being eroded it if continues to run at a relatively high level," Mr Sentance wrote.

No other MPC members have joined his call to raise interest rates from their record low of 0.5 per cent, and minutes of September's MPC meeting showed that some of his colleagues thought the chance had increased that the central bank may have to provide more stimulus to boost growth.

Mr Sentance said that one of the main factors pushing up inflation had been rising import prices, exacerbated by the weakness of the pound.

This had helped to boost demand for British exports and propel growth in the second quarter, while an improvement in domestic demand had allowed firms to pass on their higher costs to customers.

"We should take imported inflation seriously and not just treat it as a minor inconvenience," Mr Sentance wrote.

"A perception that the MPC might be starting to raise interest rates sooner rather than later would have probably led to a stronger currency than we have seen in recent months – dampening down rising import costs and subduing their impact on inflation."

Mr Sentance added that recent business surveys had also shown that price pressures were picking up.

"Indications that some retailers may increase their prices ahead of January's VAT rise add to these concerns," he said.