Bank of England (BOE) Governor Andrew Bailey warned that the central bank may have to consider a higher interest rate hike at its next meeting.
Although plans to implement the tax were scrapped on Friday, Bailey said the extra stimulus provided in last month's mini-budget would boost inflation and force banks to act.
The tax repeal also saw Kwasi Kwarteng sacked as finance minister who was later replaced by Jeremy Hunt.
Jeremy Hunt has confirmed the government will present its budget on October 31, while on November 3 the monetary policy decision by the BOE will be decided.
Bailey said Russia's war in Ukraine had left the UK in a bigger shock than during the oil crisis of the 1970s.
Therefore, the government's decision to protect households and businesses by imposing price caps on energy bills is understandable.
Even so, he said the price cap would increase inflationary pressure due to increased demand.
The central bank previously raised interest rates by 50 basis points to 2.25% in September, and Bailey's warning has fueled speculation for a 75 basis point or 100 basis point hike.
