LONDON Incoming Bank of England deputy governor Sarah Breeden said she would seek a balanced approach to judging the need for more interest rate hikes, in comments that suggest she will sit as a centrist on the rate-setting Monetary Policy Committee.

Breeden, who will replace Jon Cunliffe as the BoE's deputy governor for financial stability in November, said she saw balanced risks to growth and unemployment in both directions.

Economic output was likely to be flat in the next couple of years, she said.

"I will, after November, be very careful in balancing those two factors: the risk of inflation becoming embedded through more persistent, second-round effects, as well as the impact of tightening coming through," Breeden told parliament's Treasury Committee in a hearing convened to approve to her appointment.

Her comments echoed those of her predecessor Cunliffe, who last week said rate decisions would be "very finely balanced".

"I agree with the MPC that the risks to inflation around the August forecast are skewed to the upside," Breeden added in her written report.

Breeden said she expected inflation to be "around the 2% target in two years' time".

(Reporting by Huw Jones and Muvija M.; Writing by Andy Bruce; Editing by Sachin Ravikumar and William James)