Britain’s economic recovery risks being derailed by a potential policy misstep if the Bank of England chooses to increase interest rates too quickly, international investors have warned. 

Almost half of investors surveyed by Deutsche Bank warned that the UK was most likely to push up borrowing costs too rapidly, in a bid to stop prices running out of control.

The Bank of England was deemed the central bank most at risk of a hawkish policy error that slams the brakes on the recovery amid growing worries of stagflation. 

A total 45pc of investors surveyed said they expected the Bank of England to rush into raising interest rates, compared with a fifth that expected policymakers to move too slowly. Just one in five investors believe the Bank will get policy right.