BOE’s Bean: First Rate Rise Will Signal Economy Is Healing

Bank of England Deputy Governor Charlie Bean said the first interest-rate increase from the current record low will indicate the economy is returning to normal.

An increase “will be a symbolic step, because it will be an indication that we are on the road back to normality,” Bean, who oversees monetary policy at the central bank and will retire on June 30, told the Sunday Times in an interview. “I would welcome us getting on to the path of normalization, as a demonstration that the economy is healing,” he added.

BOE Governor Mark Carney said June 12 a rate increase may come sooner than investors expect, though he cautioned that rising mortgage debt may threaten the recovery. The central bank’s Monetary Policy Committee cut the key rate to 0.5 percent in March 2009. Under Carney’s forward guidance policy officials had pledged no change until slack had been used up.

Bloomberg

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