Deputy Bank of England Governor Clare Lombardelli said on Monday she was more worried about the risk that inflation comes in higher - not lower - than the central bank has forecast as she made the case for only gradual reductions in interest rates.

Inflation shows how the price of goods and services has changed over time, with the Consumer Price Index (CPI) being the primary measure

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Inflation is set to rise back above the Bank of England’s target level when the latest figures are revealed on Wednesday, according to economists. The Consumer Prices Index (CPI) measure of inflation fell to 1.7 per cent in September’s reading – its lowest level in three years – but experts predict October’s reading will be above 2 per cent.

The Bank of England will likely lower borrowing costs gradually in the months ahead, but should remain “vigilant” for signs of an economic slowdown that could require it to move more rapidly, Deputy Governor Clare Lombardelli said.

Bank of England Deputy Governor Clare Lombardelli said on Monday she was more worried about the risk that inflation comes in higher - not lower - than the central bank has forecast as she made the case for only gradual reductions in interest rates.

Clare Lombardelli warned it was 'too early to declare victory on inflation' because the pace of wage growth was not slowing as much as expected.