BoE Deputy Says UK Rates Could Rise Earlier and Remain at 3 Percent

May 26, 2014 Share Print 0

The Bank of England’s plan to increase interest rates only gradually means it should move earlier than would otherwise be the case, a top BoE policymaker told BBC Radio on Sunday.

“There’s a case for moving gradually because we won’t be quite certain about the impact of tightening the Bank Rate given everything that has happened to the economy,” BoE Deputy Governor Charlie Bean said in the BBC interview.

“It might not operate in quite the same way as before the crisis. So that’s an argument if you like for being a bit cautious, moving in baby steps to avoid making mistakes,” he said. “If you want to pursue that strategy you need to start taking those baby steps a bit earlier, otherwise you end up being behind the curve.”

The Bank of England last week said some of its top officials believed the case for keeping rates on hold at their record low level was now more finely balanced as Britain’s economy is growing at an annual rate of about 3 percent.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.