Workers asking for pay rises risk embedding inflation, says Bank boss

'If everybody tries to beat inflation - in price-setting and wage-setting - it gets worse,' warns Andrew Bailey

• Business live updates: Bailey denies being slow on rate rises

Workers should refrain from asking for inflation-matching pay rises, according to the governor of the Bank of England, who warned there was a risk of inflation becoming embedded".

Andrew Bailey, who added that he does not expect interest rates to settle at pre-financial crisis levels of about 5%, refused to be drawn on what an appropriate pay rise would be, a day after he warned inflation would hit 13% in October. The Bank's inflation target is 2%.