The Governor of the Bank of England, Mark Carney, has said that UK interest rates are likely to rise at the “turn of the year”.
In a speech at Lincoln Cathedral, on the occasion of the 800th anniversary of the Magna Carta, Mr Carney said: “It would not seem unreasonable to me to expect that once normalisation begins, interest rate increases would proceed slowly and rise to a level in the medium term that is perhaps about half as high as historical averages. In my view, the decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year.”
Interest rates have been held at 0.5% for six years, as the economy recovers. Meanwhile, the UK inflation rate is currently at zero, although this is likely to rise as lower oil prices start to impact.