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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The unexpected increase complicates expectations of another interest rate cut in December, following the Bank’s recent decision to reduce rates by 25bps.

The U.K.’s annual rate of inflation rose above the Bank of England’s target in October, a move that was expected by policymakers, who have said they would cut their key rate only gradually.

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.

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.