Richard Lambert, the new director-general of the Confederation of British Industry and a rate-setter as recently as March, thinks the Bank of England should refrain from raising borrowing costs on Aug 3. Expectations of a quarter-point rate hike next month have mounted in recent days as official figures showed inflation in June rising further above the central bank's target and economic growth in the second quarter accelerating. Lambert urged the seven rate-setters -- the Monetary Policy Committee is two members short at present following Lambert's early departure and the death of David Walton -- to hold fire for now as core inflation measures remain subdued. However, he conceded that a rate rise may be "appropriate" later in the year if new inflationary pressures emerge. He told a press conference that core inflation, which strips out energy and food costs, has remained remarkably stable as manufacturers have not passed through higher raw material costs as much as anticipated and wage rises have been remarkably modest despite sky-higher energy costs. "We think the Bank should not be in too much of a hurry to tighten policy," he said. In any case he said headline inflation is forecast to drop down towards the BoE's target over the coming years as last year's energy spike drops out of the annual comparison and global economic growth starts to slow from the recent highs. He also said a quarter-point rate hike in the repo rate to 4.75 pct could have damaging effects on fragile consumer and business confidence if the increase is interpreted as the start of a new policy phase. "A change in direction is something you have to give extra special thought to," he said.