Interest rates could take longer to fall, says Bank

Getty Images

UK interest rates could take longer to fall after the Bank of England forecast that inflation will creep higher again.

It said while last week's Budget will initially boost economic growth and cut unemployment, measures such as raising the cap on bus fares and VAT on private school fees will push prices up at a faster rate.

The Bank cut interest rates to 4.7% from 5% in a move than had been widely expected.

Bank governor Andrew Bailey said rates were likely to "continue to fall gradually from here”, but cautioned they could not be cut "too quickly or by too much”.