Speaking at an online webinar on Friday, he said he wanted to assess the data on the impact on the economy, before deciding how to vote on 16 December.
“At present, given the new Omicron COVID variant has only been detected quite recently, there could be particular advantages in waiting to see more evidence on its possible effects on public health outcomes and hence on the economy,” he said.
Saunders, one of the more hawkish officials, voted for an interest rate hike at the start of November. He was one of two who voted to tighten monetary policy by curtailing the asset purchase program and raising Bank Rate to 0.25% from record lows of 0.1%
Meanwhile, the other seven members of the Monetary Policy Committee (MPC) chose to keep rates on hold, despite widespread anticipation it would increase.
Read more: Bank of England holds interest rates at all-time low of 0.1%
The UK's main interest rate has been at an all-time low of 0.1% since the pandemic began, having been set at 0.75% pre-pandemic. A rise to 0.25% would have been the second lowest rate the bank has ever set.
Analysts have said that they expect the rate to be hiked to pre-pandemic levels in the next 18 months as the economy resumes a more steady course.
On Friday, Saunders warned of the risks of waiting too long before raising borrowing costs, saying a “continued delay also could be costly”.
He added that keeping the cost of borrowing at ultra-low levels could risk causing the labour markets to tighten further and exacerbate inflation, which “could require a more abrupt and painful policy tightening later”.
“For me, the balance between these considerations is likely to be a key factor at the December meeting”.
Watch: What is inflation and why is it important?
Traders cut their bets that the MPC will increase the Bank Rate to 0.25% at the next meeting. The currency market position now implies a 33% chance of an increase, having been as high as 60% previously.
Saunders said it would not be “sensible to give precise forecasts” on the future path of rates, but advised: “if the economy develops in line with the central forecast or my expectations, the direction of travel for Bank Rate during the next few quarters is clearly likely to be upwards.”
His comments come just weeks after Andrew Bailey, the governor of the Bank of England, voiced his concern about the UK’s rising inflation, admitting that he is “very uneasy about the situation”.
Appearing in front of the Treasury Committee, he said that growth in the British economy is starting to “flatten out”, meaning that Britain was facing more “two-sided risks” than before.
Read more: European stock markets push higher as Omicron strain concerns ease
He pointed to weaker growth on one side, and rising inflation on the other, in the midst of an ongoing supply chain and energy crisis that is dampening recovery and pushing inflation even higher.
“I am very uneasy about the inflation situation… I want to be very clear on that.” Bailey said. “It is not, of course, where we want it to be, to have inflation above target.”
UK inflation stood at 4.2% in October, soaring to its highest level in 10 years thanks to a rise in fuel and household energy costs. This is more than double the Bank’s 2% target, and is expected to keep climbing to as much as 5% by next April.