A Bank of England politician has warned households to prepare for “much earlier” rate hikes if inflationary pressures mount, and Kraft Heinz was the latest to say food prices will rise.

Michael Saunders, one of the bank’s nine rate setters, said investors were right to bet on a faster rise in borrowing costs as consumer price inflation will soar above 4%, adding to signs that Threadneedle Street could become the first major central bank who has been raising prices since the outbreak of the coronavirus pandemic.

“I am not in favor of using code words or expressing our intentions too precisely in advance of the meeting. The decisions are made at the right time, ”Saunders said in an interview with the Telegraph. “But the markets have been pricing in a bank rate hike earlier than before in the past few months, and I think that’s fair.”

His comments come as households face rising energy bills and the prospect of higher food prices. The boss of Kraft Heinz said on Sunday that the company, the maker of Heinz tomato ketchup and baked beans, had raised prices in several countries.

“We’re raising prices around the world where necessary,” Miguel Patricio told the BBC, adding that there were a number of reasons for the price increases.

“Especially in Great Britain with the shortage of truck drivers. In [the] Logistics costs in the US have also increased significantly and there is a shortage of labor in certain areas of the economy, ”he said.

Iceland, the UK’s frozen food chain, recently warned that “price increases are inevitable” while Tesco and Co-op are among the grocery stores that have issued similar warnings.

Last month, the Bank of England’s Monetary Policy Committee voted unanimously to keep rates at 0.1%, an all-time low despite the annual inflation rate of 3.2%, its highest level in more than nine years and above the bank’s target of 2%.

However, Saunders and a deputy governor Dave Ramsden voted to cut the central bank’s quantitative easing program limit of £ 895 billion by £ 35 billion.

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Saunders said markets had priced in full a rate hike by the UK central bank in February and half a hike in December borrowing costs.

“I’m not trying to say exactly which one, but I think it is fair that the markets moved on to a significantly earlier course of tightening than before,” he said.

Saunders’ comments came shortly after Bank of England Governor Andrew Bailey said inflation above the central bank’s 2% target was worrying and needed to be managed to prevent it from becoming permanently anchored.

“We’re going to have a very delicate and challenging job, so in some way we have to keep the thing from being permanently embedded because that would obviously be very harmful,” Bailey told the Yorkshire Post.

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