Bank of England Governor Andrew Bailey has said the UK is “much nearer” to the peak level of interest rates but cautioned that inflation could rise again in August because of the effect of fuel prices. <a href="https://www.thenationalnews.com/world/uk-news/2023/03/24/bank-of-england-warns-more-price-rises-will-spark-higher-interest-rates/" target="_blank">Andrew Bailey</a> told a group of MPs during a Treasury committee session that there is no longer a clear upward path for interest rates, which stand at 5.25 per cent. Rates have been rising steadily for more than 18 months, putting pressure on borrowers but rewarding savers to bring UK inflation back down to its 2 per cent target. Some economists think rates will rise to 5.5 per cent this month as pressure on the Bank to control inflation remains. “There was a period where it seemed to me to be clear that rates needed to rise going forward and the question for us was how much and over what timeframe," Mr Bailey said. “We’re not, I think, in that place any more and that’s why we shifted our language to being much more evidence and data-driven. “I think we are much nearer now to the top of the cycle. I am not, therefore, saying that we are at the top of the cycle because we still have a meeting to come. "But I think we are much nearer to it, on interest rates, based on the current evidence.” He said no decision has been made prior to policymakers meeting later this month. Mr Bailey stood by earlier forecasts that inflation would fall sharply towards the end of the year amid scrutiny over the economy. Consumer Prices Index inflation fell to 6.8 per cent in July, from 7.9 per cent in June. “It is possible that we will get a tick-up in the next release, as fuel prices went down in August last year but up this August," Mr Bailey said. “I will add that the August monetary policy report does not have a recession in it, but it has a very weak growth path." He also admitted to being surprised by the continued pressure from wage bargaining by private-sector workers on UK inflation in recent months. Mr Bailey has previously said that price and wage increases are “unsustainable” as he encouraged employers not to raise salaries by more than the level of inflation.