Bailey told an audience of City figures at the annual Mansion House dinner on Tuesday that the central bank’s Monetary Policy Committee had an “absolute priority” to bring inflation back down to its 2% target and faced the “largest challenge” to inflation control since the bank gained independence on setting interest rates in 1997.
The governor said that a 50 basis point rate increase would be on the table on August 4.
"A 50 basis point increase will be among the choices on the table when we next meet. 50 basis points is not locked in, and anyone who predicts that is doing so based on their own view," Bailey said, adding that the economy was already slowing.
Financial markets price in a 94% chance that the BoE will raise Bank Rate to 1.75% from 1.25%.
The MPC has so far opted for five back-to-back 25 basis points hikes to tackle record high inflation.
"We recognise a trade-off in a situation of high inflation and weakening growth,” Bailey added.
A half-percentage-point interest rate rise would be the largest increase since 1995.
A 50 basis point jump would add almost £70 to month to a the costs of a typical £250,000 mortgage on the average five-year rate, according to data from Moneyfacts.
“Let me be quite clear: there are no ifs or buts in our commitment to the 2% inflation target. That’s our job, and that’s what we will do,” he said.
Watch: How does inflation affect interest rates?