Consumer price inflation hit a 10-year high of 4.2pc in October amid severe supply chain disruptions and high energy costs. It is expected to increase further in the coming months, with the Bank forecasting it will peak at about 5pc in April.
Mr Saunders’ comments came as survey data showed input price inflation for manufacturers hit a fresh record high in November.
IHS Markit said companies faced another month of “rapid” cost increases, including higher wages and prices paid for energy and raw materials.
New orders increased at the fastest pace since June amid rising spending, according to purchasing managers, with companies hiring rapidly in response to demand and increasing backlogs.
Chris Williamson, IHS Markit’s chief business economist, said: “A combination of sustained buoyant business growth, further job market gains and record inflationary pressures gives a green light for interest rates to rise in December.”
The picture for global monetary policy was further clouded by weak US jobs numbers, which showed companies added fewer than half the number of employees expected.
Non-farm payrolls increased by 210,000 in November, according to the Bureau for Labor Statistics, well below an expected rise of 550,000.
However, US unemployment fell from 4.6pc to 4.2pc as readings for previous months were revised higher. November’s reading may be similarly adjusted.
The report comes after the Federal Reserve chairman, Jerome Powell, said the “very strong” US economy meant the central bank may move quicker than previous indicated to tighten policy.