The Bank’s Monetary Policy Committee will vote in two weeks on whether or not to alter the bottom fee, which is at present at 5.25 %.

Economists are torn on whether or not there will likely be one other rise.

And Mr Bailey mentioned he couldn’t say now how the MPC would vote. But he advised MPs it was now not “clear” that rates of interest wanted to maintain rising.

He advised the Treasury Select Comm-ittee: “There was a period where it seemed to me to be clear that rates needed to rise going forwards. And the question for us was how much and over what time frame.

“But we’re not I think in that place any more. And that’s why we shifted our language to being much more ­evidence and data-driven.

“I think we are much nearer now to the top of the cycle.

“I am not therefore saying we are at the top of the cycle because we still have a meeting to come. But I think we are much nearer to it, on interest rates, based on the current evidence.”

Inflation – the speed at which costs rise – fell to six.8% in July, down from 7.9% in June. Prime Minister Rishi Sunak has mentioned halving inflation from January’s 10.7% is his “number one priority”.

Mr Bailey mentioned: “We’re currently around 0.1 percentage points from where we were expecting to be in the May forecast. So...our short-term forecast is performing better.” He added there have been alerts “the fall in inflation will continue” and will likely be “quite marked” by the tip of 2023.

But he warned rising gasoline prices in August means inflation is prone to have gone up once more when newest figures are launched. And the Bank is ready to see if falling inflation will “be reflected in wage bargaining” which may push it up.

Deputy governor Sir Jon Cunliffe mentioned there have been “mixed signals”, with persevering with pay development and providers value inflation, but additionally “some cooling in the labour market”.

The Bank’s forecast got here because the Resolution Foundation suppose tank warned any advantages from easing inflation could be worn out by tax, mortgage and lease hikes.

It mentioned households have been going through 12 months of stagnating residing requirements within the run-up to the subsequent election and no authorities has ever clung to energy in opposition to such a dismal backdrop.