The Bank of England’s chief economist said there was still “reason for caution” on cutting interest rates due to the persistence of wage pressures in the UK economy.

In an online presentation to businesses, Huw Pill pointed to the “surprising” surge in wage growth at the end of last year as evidence that underlying price pressures remain stubborn.

Private sector regular wage growth surged to six per cent in the three months to November, up from 5.5 per cent and comfortably ahead of the Bank’s expectations.

“I think that is a reason for caution, for carefulness in the way we proceed with removing monetary policy restriction and cutting bank rate,” Pill said.

“We’re not in a situation where we can declare job done,” he added.

The comments come just a day after rate-setters voted to cut interest rates by 25 basis points, the third rate reduction in the easing cycle.

Every member of the Monetary Policy Committee (MPC) voted to lower borrowing costs, although two – Swati Dhingra and arch-hawk Catherine Mann – called for a larger 50 basis point cut.