25th September 2014
Bank of England governor Mark Carney has urged that interest rates are set to rise in the coming months given that the UK economy is back on stronger ground.
The Telegraph reported that at a conference in Wales on Thursday, Carney said that the time for higher interest rates is “getting closer”.
In a bid to prop up the economy during the financial crisis, the cost of borrowing was slashed to a record low of 0.5% in March 2009, and it has been stuck there ever since.
But on the back of the more robust economic backdrop and stronger labour market Mark Carney said: “Relative to the recent past, the economic outlook is much improved.
“While there is always uncertainty about the future, you can expect interest rates to begin to increase.”
He added however that any rises would be “gradual and limited” and to a level “lower than in the past”.
“With many of the conditions for the economy to normalise now met, the point at which interest rates also begin to normalise is getting closer,” he added.
In the last two monthly meetings of the nine-member Monetary Policy Committee, two of the group voted for a rise to 0.75%.