Mark Carney said rising U.K. mortgage debt may threaten Britain’s recovery as he signaled interest rates might start to rise earlier than anticipated.
While investors don’t see the Bank of England’s benchmark rate increasing until next April, the central bank governor said it “could happen sooner than markets currently expect.” Higher borrowing costs could stretch over-leveraged households and undermine financial stability, he said.
The warning came as Chancellor of the Exchequer George Osborne said the BOE’s Financial Policy Committee will get new powers to curb mortgage lending as a surging housing market raises concern about a potential bubble. Using those measures to head off a potential crisis could allow Carney to keep interest rates at a record-low for longer.
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