Mr Bailey said interest rates must go up to prevent inflation from becoming “ingrained”.

“We have not raised interest rates today because the economy is roaring away. The economy is only now back to the size it was immediately before the pandemic,” he said.

“An increase in bank rate is necessary because it is unlikely that inflation will return to target without it. We face the risk that some of the higher imported inflation could become ingrained within the domestic economy, leading to a longer period of high inflation.”

He acknowledged families are already suffering “a squeeze on real incomes” and higher interest rates “will be felt by households and businesses”.

But he said that the rise in rates – to a level still low by historical standards – will help hold down prices in the years to come.

Ben Broadbent, one of the deputy governors, said that “extraordinary” rises in global energy prices are a key factor beyond the Bank’s control, with even bigger increases than during the oil price shock 50 years ago.

He said: “I think this represents the steepest rise in energy costs for households as a share of income in a year than we have seen ever, including the 1970s.”

Mr Broadbent added that the Bank could not have prevented this spike in inflation, as interest rates act over a two-year time period and so would have required unrealistic foresight into the energy markets.

It would have required the Bank “to have raised interest rates bang in the middle of the first wave of the pandmeic and the lockdown”, he said.