The Bank of England, which this month raised interest rates for the first time in a year, indicated Wednesday that further hikes are on the cards as inflation was set to rise, REPORTED DPA. Soaring gas and energy prices were cited in the bank's quarterly inflation report Wednesday among factors that were likely to push inflation above its 2 per cent target in the next two years. The Bank's Monetary Policy Committee (MPC) surprised experts in the City last Thursday by raising interest rates last week to 4.75 per cent in a bid to contain inflation. Soaring oil prices helped push up inflation to 2.5 per cent in June. The Bank of England indicated in its report that a further rise in inflation was to be expected during the course of this year before falling back as prices eased. Even when based on City forecasts for interest rates at around 5 per cent, inflation would remain above its 2 per cent target. The Bank predicted the UK economy would continue to recover as consumer spending picked up, investment recovered and trade provided a boost.
