There is no "underlying inflation problem’’ in Britain despite the CPI measure hitting 4.5 per cent last month, Business Secretary Vince Cable has said.

Mr Cable signalled backing for the Bank of England keeping interest rates on hold amid sharp price hikes, describing its approach as 'reassuring'.

He also warned that people had not yet grasped the seriousness of the credit crunch, and there was the potential for another disaster.

The comments, in an interview with the New Statesman, risk infuriating savers who have seen the value of their money dwindle over the past 16 months when inflation has been above the two per cent target.

By convention, politicians avoid giving their views on interest rates as they are controlled independently by the Bank.

But the Liberal Democrat Cabinet minister suggested that the level should remain at the record low of 0.5 per cent.

"We don't have an underlying inflation problem," Mr Cable said. "The Bank's job, as the governor (Mervyn King) keeps pointing out, is not to look at today's numbers, but to look 18 months ahead. It still seems that the centre of gravity at the Monetary Policy Committee is very much at the governor. I find that reassuring."

Mr Cable went on: "I think the thing that worries me more than anything else (is that) we really haven't engaged with the real depths and seriousness of the financial crash.

"I was very impressed with that Warren Buffet metaphor that asset-backed mortgage lending was the atomic bomb, and that there are hydrogen bombs out there.

"I just don't think that collectively governments have got to grips with this at all."

Asked whether another financial 'bomb' could go off, he replied: "It's not imminent. But you can see this happening."

Mr Cable also risked opening a rift with Chancellor George Osborne by supporting calls for the Scottish government to be given control over corporation tax.

The Treasury has been resisting demands from First Minister Alex Salmond to be given more powers after the Scottish National Party's resounding triumph in recent elections.

But, referring to corporation tax, Mr Cable said: "I think the logic of that is irresistible, if you have a devolved system.

"If you want power, then you have to have the responsibility, and the responsibility goes with making fiscal choices, and fiscal choices involve not just spending a block grant, which is what happens at the moment, but making decisions on how to raise revenue."

Mr Cable said he had a 'businesslike relationship' with Mr Osborne but there had been 'no peace treaty thing’.

"I respect the fact that we have to have a common view on the basic economic management, and he gives me a major role to play in the growth agenda, which is extremely important for government," he added.

Yesterday the business secretary was forced to backtrack after saying he believed Greece would have to reschedule its debts, with aides stressing he was only voicing a 'personal' opinion rather than stating government policy.