The Bank of England has admitted it has been consistently wrong on inflation for years.

Forecasts for both wage growth and inflation had “proved repeatedly too low” since 2022, officials at the Bank said.

The findings of its first ever forecast evaluation report will fuel criticism that officials led by Andrew Bailey, the Governor, did not respond quickly enough to sharply rising energy prices following Russia’s invasion of Ukraine.

Mr Bailey admitted in 2023 that the central bank had “very big lessons to learn”.

The review found that inflation has been nearly two percentage points higher than the Bank of England’s forecasts since mid-2021, with wage growth nearly three percentage points higher on average over the same period.

Officials admitted that the central bank’s understanding of the labour market was a “relative weak spot” and criticised the Office for National Statistics (ONS), warning that revisions to data meant that “bank staff did not have access in real time to the most accurate steer”.

The Bank produced the report into its own performance in response to a recommendation from Ben Bernanke, a former chairman of the US Federal Reserve.

Mr Bernanke’s review of Threadneedle Street’s forecasting in 2024 identified “serious deficiencies” and followed widespread criticism of the central bank’s handling of the inflation crisis.

Separately, the Bank on Friday said the rise in the Government’s long-term borrowing costs last year was caused in part by pension funds buying less of its debt.

Interest rates on long-term bonds rose for nations around the world but Britain suffered an extra boost to borrowing costs as pension funds cut back purchases of long-term bonds, officials said.

The finding means the UK may be more exposed to volatility in world markets, according to the Bank.

Financial markets charged Britain an interest rate of above 5pc for almost all of last year on its 20-year gilts, compared with a rate below that threshold for most of 2024. Public finances are highly sensitive to even small changes in borrowing costs given the scale of Britain’s £2.9tn national debt.

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