london dec 14 reuters  the international monetary fund warned the bank of england on tuesday to avoid an inaction bias in its approach to combating price pressures as it said inflation in britain was likely to hit a 30year high of 55 next year in an annual review of britains economy the imf said the country had recovered more strongly than expected from the covid19 pandemic although the latest omicron variant was likely to cause a mild slowdown over the next three months the boe has said that interest rates will need to rise to ensure that consumer price inflation  currently 42  returns to its 2 target but it held off from a widely expected rate rise last month due to concern about the impact of the end of the governments job furlough programme on sept 30 and it is expected to do so again on thursday due to the impact of the omicron variant monetary policy also has a key role to play in managing volatility but could face difficult tradeoffs the imf said it would be important to avoid inaction bias in view of costs associated with containing secondround impacts careful communication would be needed to lay the groundwork with markets for potentially more frequent policy moves it added the boe should also take the earliest opportunity to put the quantitative tightening program onto a preprogrammed course and for the bank to give guidance on the framework to be used to manage the process back towards the steady state balance sheet the boe is due to complete its 895 billionpound of asset purchases this week and has said it will stop reinvesting the proceeds of maturing bonds once bank rate rises to 05 the imf left unchanged the growth forecasts it made in october that britains economy would expand by 68 this year and 50 in 2022 after shrinking by a historic 98 in 2020 when it felt the full force of the covid19 pandemic britains government should be ready to reinstate support such as its furlough programme and extra assistance for the poorest households if there are significant new lockdowns but should not make furlough a permanent part of its toolkit the government should also consider bringing forward some fiscal tightening by a year to next year and raising the tax burden on the richest fifth of the population to fund more investment in infrastructure skills and decarbonisation