The Bank of England's chief economist, Hugh Peel, told the Financial Times that interest rates will need to rise further in 2027 to combat inflation that has reached 3.5%. According to him, the regulator will have to continue to tighten the policy due to the risks of "spillover effects", when the increase in energy prices is transferred to wages and corporate costs. The pill added that the market's expectations for a rate increase to almost 5% are not unreasonable.