David Miles, the incoming head of macroeconomic analysis at the Office for Budget Responsibility, warned that delaying interest rate rises again could let inflation become embedded in the economy, forcing Mr Bailey to raise rates faster later.

He told the Treasury Select Committee: “If we had persistent inflation that doesn’t fall away after spring, then we could see really quite significant rises in interest rates,” “I don’t think it’s out of the question that we get much higher interest rates than the financial markets are expecting,” he added, suggesting financial markets had failed to appreciate the risk of base rate borrowing costs rising quickly to 3pc. 

Mr Miles said: “Some in financial markets will say that’s just not going to happen. I think they have misplaced confidence about that.”

Sanjay Raja, economist at Deutsche Bank, predicts inflation could rise to 6pc early next year, its highest since the early 1990s, and expects the Bank’s Monetary Policy Committee to raise rates from its emergency level of 0.1pc to combat the threat.

The extent of inflation across the economy is “now blindingly obvious”, he said, with more to come as “furniture, transport, clothing, food, and broader manufactured products are all registering some very serious pressures that should continue to feed through.”

Earlier this week the International Monetary Fund called on the Bank to raise rates cautiously, warning that “inaction could allow second-round effects of inflation to proliferate”.

However Ellie Henderson, economist at Investec, said the risks posed by omicron mean the Bank may be forced to keep rates on hold despite rising prices.

“There is now the real risk of inflation becoming entrenched – especially considering the signs of second round effects in terms of rising wages, supported by a strong labour market – but this is balanced against the threat to the economic recovery from the new Omicron variant,” she said.