He said it is more likely than not that he will write open letter to Chancellor Philip Hammond, explaining why inflation exceeded the target by one percentage point.
Following a series of relatively hawkish comments by governor Mark Carney and other members of the monetary policy committee (MPC), the Bank had appeared poised to raise the cost of borrowing back to its previous low of 0.5%, the first hike since the 2008 financial crisis.
The rise in September signifies that inflation in the quarter has exceeded the Bank of England's forecast of 2.7 percent in the third quarter, made at the time of the August Inflation Report.
Mr Carney said the rise in inflation is nearly entirely the result of the drop in the value of sterling, and he expects this impact to drop out of the statistics in the coming months. She added that a premature rate hike could prove more costly to the economy than an early rate cut. In late-morning trading, it was up 0.1 percent at $1.3268. Much of the increase however has been caused by the fall in the value of the pound since last year's Brexit vote which is likely to be a temporary driver of price increases. That has ratcheted up the cost of imported goods like food and energy, trebling the inflation rate since September 2016.
Bank of England governor Mark Carney told the Treasury Select Committee in Westminster this morning (17 October) that he expects United Kingdom inflation to peak at just more than 3 per cent, in the next two months.
However, the British pound remained lower against the dollar despite confirmation of Carney's view on inflation.
The central bank's upcoming economic projections, released on November 2 alongside the rate decision, are set to show growth remaining weak and inflation edging lower.
(Update:) Inflation has hit a five-year high of 3% and the question on everybody's lips is will the Bank of England raise interest rates next month? He said he was not part of the majority at the last meeting who thought interest rates should head higher soon, largely because there is little evidence that inflation was boosting wages.
BOE deputy Governor Dave Ramsden was answering United Kingdom lawmaker's questions in a parliamentary committee, alongside new external BOE policy setting member, Silvana Tenreyro. "We expect that inflation will peak in and around the October figure, October-November figures, peaking potentially above the 3% level".
Ramsden cautioned that leaving the European Union is "a multi-dimensional process" and that the coming months are crucial ones for Brexit.
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