Monetary Policy Committee member Andrew Sentance added yesterday to the hawkish tone by warning inflation expectations were "very dangerous if they become unhinged".

His comments are likely to fuel thoughts in the City that there is a camp within the Bank of England committee whose fingers are itching to pull the interest rate trigger again soon, following last week's surprise quarter-point rise in UK base rates to 5.25%.

Sentance also appeared to heap doubt on the potential for the supply side of the economy to grow particularly strongly in coming years. He questioned the extent to which growth of labour supply, through the likes of immigration, and improvements in productivity would add to the economy's supply potential and thus allow stronger growth with lower inflation.

His views are at odds with those of MPC member David Blanchflower, the US-based labour market economist. Blanchflower has voiced his belief that there is greater slack in the labour market than some fellow MPC members believe - a factor which would keep a lid on wage settlements and hold inflation down.

Sentance, a former chief economist of British Airways who only joined the MPC in October, had already established his hawkish credentials. He voted unsuccessfully with fellow new boy Tim Besley for a rise in rates in October. Nevertheless, even by his standards, Sentance's speech looked hawkish.

Referring to the rise in annual UK consumer prices index inflation to 3%, fully one percentage point above the Bank of England's 2% target, Sentance told an audience in London: "As today's inflation figures highlight, the current challenge is to ensure inflation returns to target after its recent pick-up, associated with high energy prices and strengthening demand."

He added: "Inflation expectations can be very powerful in maintaining monetary stability if they are well anchored, as they have been in recent years. They are very dangerous if they become unhinged, which is what happened in the UK between the mid-1960s and the mid-1970s. It took us two decades, three recessions, and a prolonged period of high unemployment, before expectations of low inflation were properly re-established in the mid-1990s."

Sentance highlighted the strength of the UK and global economy. He said: "Over the past year, domestic demand has picked up following a period of relative weakness in 2005, and this has been accompanied by strong growth in the world economy. The need to keep the growth of demand in check - and hence restrain wage and price increases - has been an important factor in recent interest rate decisions by the MPC."

Sentance acknowledged the MPC was now "very close to the level of inflation at which a letter from the governor (of the Bank of England, Mervyn King) to the chancellor is triggered".

However, he claimed: "In 1997, most economic commentators would have been amazed if they could have foreseen that we would be approaching the 10th anniversary of the MPC, and such a letter has yet to be written."