Bank of England Governor Andrew Bailey said today there was "very clearly" a risk that high inflation gets embedded in Britain's economy if there is a cycle of higher prices pushing up wages.

"It's not just wage setting, it's also price setting - it's both," Andrew Bailey told UK politicians.

"There is very clearly an upside risk there. The upside risk comes through from the second-round effects," he added.

Bailey told parliament's Treasury Committee that there were also downside risks that inflation comes in lower than the Bank of England's forecasts over the next three years.

The Bank of England raised interest rates to 0.5% this month from 0.25%.

But four of its nine monetary policymakers voted for a bigger increase to 0.75%, which would have been the first half-point rise since the bank's independence in 1997.

British inflation hit its highest in nearly 30 years in January at 5.5%, and the Bank of England expects it to peak at around 7.25% in April when a 54% rise in regulated household energy tariffs takes effect.

Investors are fully pricing in another 25 basis-point rate hike at the Bank of England's next scheduled meeting which concludes on March 17 followed by another in May.

Bailey also said the bank's top monetary policymakers did not have a big disagreement on the level that interest rates need to reach eventually, even if they were divided this month about the pace of the increases.

"It's important not to put too much emphasis on whether we took a different view on the level that we expected to get to, as opposed to the pace by which we get there," he said.

Andrew Bailey, who takes home more than £500,000 a year, also faced ire today from lawmakers over his call for people to show pay restraint in a bid to curb inflation pressure.

Earlier this month politicians and workers' groups criticised Bailey for telling people not to ask for big pay rises because of the risk this would further stoke inflation pressure.

His call for pay restraint followed the worst decade for wage growth since the mid-19th century, according to the Resolution Foundation, and he was accused by some commentators of being out of touch with the struggles of working households.

Even the British government - usually reluctant to air differences with the Bank of England in public - said it wanted a high-wage economy but that it was not in the business of telling the private sector how to set wages.

Bailey today sought to clarify his comments during an appearance before the Treasury Committee, saying companies should also take some of the hit by showing restraint in raising prices.

But Angela Eagle, from the opposition Labour Party, contrasted the average earnings of care workers with Bailey's salary. "What was it, governor?" Eagle asked.

"It's somewhere over £500,000. I can't tell you exactly what it was, I don't carry that around in my head," the Bank of England Governor said.

Bailey's remuneration totalled £575,338, including pension benefits, according to the Bank of England's last set of annual accounts.

UK consumer prices rose in January by 5.5% in annual terms, the highest rate since 1992.

Earlier this month the Bank of England warned that UK inflation was likely to peak at around 7.25% in April, when household energy bills are set to more than double.

"I'm not saying that people should not take pay rises," Bailey said today.

"My concern is the second round effects - that if everybody tries to get ahead of the shock that we've had from outside, then we will get the second round effects and it will get worse."

The Unite trade union said today that Bailey had put workers over company bosses and profits.