Richard Carter, Head of Fixed Interest Research at Quilter Cheviot explained the Bank of England is nervous about inflation.

But he forecasts that the central bank will inevitably end up increasing UK interest rates.

He explained: “The rise in fuel costs and all the talk of higher wages from the government will make the Bank of England nervous about inflation going above its two percent target for a prolonged period of time.

“The Bank faces a delicate balancing act in ensuring that inflation expectations among consumers and businesses remain under control while at the same time allowing the recovery to continue.

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