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Record low interest rates 'to rise in spring 2015'

21 Feb 2014

A Bank of England policy maker has announced that interest rates are expected to rise for the first time since the economic crisis.

Martin Weale, a policy maker in the Monetary Policy Committee commented in a Sky News interview that ‘the most likely path’ would be an interest rate rise in the spring of 2015.

He said that ‘the path is likely to be relatively gradual’ but also that ‘he could not rule out’ an earlier rise if wages increased more quickly than forecast.

Governor of the Bank of England, Mark Carney, previously suggested that once unemployment levels fell to 7%, the bank would consider raising interest rates. But with unemployment rates expected to reach the 7% mark in the next few months, an inflation report released by the Bank of England stated that interest rates are not likely to rise in correlation.

Unemployment has fallen faster than analysts expected, but wage increases still remain sluggish.

Howard Archer, chief UK economist at IHS Global Insight, remarked on Weale’s recent comments, saying ‘It really does tie in with what Mark Carney implied when presenting the inflation report’.