Published by Jamie JemmesonForeign exchange dealers have been advised that rising oil prices could drive up the rate of inflation in the UK.Adam Posen, a member of the Bank of England's Monetary Policy Committee (MPC), confirmed that it is prepared to respond to this development in order to keep inflation "in line with the target".However, he noted that many members of the MPC, including himself, do not believe the UK has yet reached this point, as oil prices are not as much of an issue today as they were in the past.Mr Posen cited this as one reason why the Bank of England should not rush to increase the cost of borrowing, as interest rates have now been at a record low of 0.5 per cent for more than two years."Oil prices are not yet a one-way bet," he commented.Mr Posen added that in the UK and the wider Western world, there is "little or no credit growth, little wage growth beyond productivity [and] little evidence of rising inflation expectations".The British Chambers of Commerce has already praised the MPC's decision to leave interest rates on hold this month, as it believes various financial pressures on consumers and business make it best to wait before implementing a hike.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site