LONDON, May 20 Reuters The Bank of England will need to raise interest rates further to combat the risk of selfperpetuating price rises, the central bank39;s chief economist, Huw Pill, said on Friday.

Pill said the central bank was battling the biggest inflation challenge since it gained operational independence in 1997, with inflation at a 40year high of 9.0 and set to hit double digits later this year.

While inflation in the shortterm was driven by factors such as geopolitical conflict, surging energy prices and supplychain bottlenecks which the BoE could not control, he said it needed to ensure expectations of high inflation did not become entrenched.

Avoiding any drift towards the embedding of such 39;inflationary psychology39; into the pricesetting process is crucial, Pill said in a speech to Wales39;s Association of Chartered Certified Accountants.

Tightening still has further to run, he added.

Earlier this month the BoE said some degree of further tightening in monetary policy may still be appropriate in the coming months although two members of its Monetary Policy Committee reckoned this guidance was too aggressive.

The BoE has raised interest rates four times since December more than any other major central bank and financial markets expect rates to reach 2 by the end of the year from 1 now.

BoE forecasts earlier this month showed inflation in three years39; time was on course to significantly undershoot its 2 target, as the economy slows and energy…