The governor of the Bank of England has warned interest rates could rise in the coming months as the economy continues to improve, a move which could hit consumer spending and retailers trying to get back on track after the recession.
Mark Carney said the country was now in a position where it could handle higher rates, but he reiterated previous suggestions that any increases would be “gradual and limited” and at a level “lower than in the past”.
Speaking at an actuarial conference in Wales, the Times reported him as saying: “With many of the conditions for the economy to normalise now met, the point at which interest rates begin to normalise is getting closer.
“While there is always uncertainty about the future, you can expect interest rates to begin to increase. We have no pre-set course, however; the timing will depend on the data.”
Rates have been at 0.5% since March 2009. Two members of the nine-strong Monetary Policy Committee voted for an immediate rise to 0.75% in August and September.
Market speculation suggests the first rate rise could come in the spring, around April or May, but some economists have said it could come as early as November.