The Bank of England has signalled UK interest rates will probably need to rise one more time for inflation to hit the 2% target.
The central bank's quarterly Inflation Report showed CPI inflation fractionally above the 2% target in two years, if interest rates rose in line with market expectations.
Inflation would clearly overshoot the target if rates stayed at their current 5.75%, the report showed.
The BoE has already raised borrowing costs five times in the last year, and the report reinforced expectations it would hike again.
The central bank did not appear unduly worried by the recent turmoil in financial markets but warned that if credit conditions worsened, there would be a downward impact on growth.
