UK interest rates 'to rise in 2015' Bank figure says

Monetary Policy Committee Image copyright Getty Images
Image caption Mr Weale is a member of the Bank of England's rate-setting Monetary Policy Committee

UK interest rates are likely to rise for the first time since the financial crisis in the spring of 2015, one Bank of England policy maker has said.

Martin Weale, a member of the Bank's rate-setting Monetary Policy Committee, said a spring 2015 rise was "the most likely path" in a Sky News interview.

But he said a rates rise could come sooner if wages rise faster than expected.

Interest rates have been held at a record low of 0.5% since 2008.

Mr Weale's comments follow last week's Bank of England inflation report, when Bank governor Mark Carney said interest rates were unlikely to rise even if the unemployment rate fell below 7%, as is now expected in the coming months.

Mr Carney had previously suggested the 7% unemployment rate as a threshold for considering an interest rates rise.

"I think it is very helpful that we try and explain the most likely path for interest rates is that the first rise will come perhaps in the spring of next year, and then the path is likely to be relatively gradual," Mr Weale told Sky News.

But he added that he could "not rule out" an earlier increase, if average earnings increased quicker than expected.

Although unemployment has fallen faster than many analysts expected in recent months, wages have not risen as quickly.

"You don't get much more specific forward guidance than what Martin Weale said," said Howard Archer, chief UK economist at IHS Global Insight.

"It really does tie in with what Mark Carney implied when presenting the inflation report and in the inflation forecasts contained in the report."

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