Central Bank Lieutenant Governor Dave Ramsden said wage increases could slow the pace of the Bank of England's basic interest rate cuts.
His comments come after wage growth accelerated to 6.2% in the private sector and 4.7% in the public sector, according to official data. 
This will boost private wage growth three times faster than the bank's 2% inflation target.
“That was a concern for me,” said Ramsden, who speaks at Stellenbosch University near Cape Town.
“We don't see the downside of the risk of a sustainably blowing the 2% inflation target over the medium term.
“Instead, I think they're both sides and reflect the possibilities of more inflation and disinly scenarios.”
His comments came after nine monetary policy committees of banks where Ramsden sits, cut from 0.25% to 4.5% earlier this month amid signs that the UK economy is struggling.
Bank of England Governor Andrew Bailey said many in the city will adopt the “gradual and prudent” approach to rate cuts, which is necessary to mean at least two interest rate cuts this year.
The committee also predicts that it will rise to 3.7% in the third quarter of this year before the current 3% inflation set back.
Goldman Sack analyst Sharon Bell said since Prime Minister Rachel Reeves' October budget, the UK has seen businesses cut jobs, raise prices and pay more for the rest of their staff.
“This trend in raising prices has driven headline inflation due to higher energy costs and VAT for tuition,” Bell added in a note to investors.
Ramsden also noted that the threat of a global tariff war caused by US President Donald Trump is a new factor to be considered.
He states: “There is great uncertainty about the next step the current US administration will take regarding tariffs and, accordingly, potential actions of other countries.
“At this point, there is not enough specific information to incorporate into the forecasting model. However, it is clear that uncertainty about global trade policy is already growing.”
Ramsden voted with most of the Monetary Policy Committee this month to cut bank fees. Two MPC members, Swati Dhingra and Catherine Mann, voted for a bigger cut of 0.50%.
But at an earlier meeting in December, Ramsden was part of a flashy minority who voted for a 0.25% cut when the majority of the committee wanted to hold off interest rates.
Earlier this week, Dingra said Bank of England policymakers are conflicting whether “slow” base rate cuts should be limited to one base rate cut every three months.
As wages rise, the pace of interest rate reductions can slow down. BoeRamsden first appeared in mortgage strategies.
