Further rate rise `could happen in autumn`

The Bank of England has signalled that it may need to raise the base interest rate again this year to help curb inflation.

According to its latest quarterly Inflation Report, a quarter-point increase to six per cent - the highest level since 2000 - could help bring inflation back down to its two per cent target during 2008.

The Bank`s governor Mervyn King said that recent upsets in the credit market, caused by the US subprime lending turmoil, was not an "international financial crisis".

"[We] cannot be sure if what we`re seeing so far foreshadows a more disruptive move on the markets or whether there`s a more gradual easing of pressure that allows credit spreads to widen to more sensible levels," he remarked.

"So it`s impossible at this stage to judge how large and how persistent the tightening of credit conditions is likely to be."

The Bank`s monetary policy committee has increased the base interest rate five times in the past year.