News Column

Coutts-BoE's Bean says interest rates should be raised in baby steps

May 30, 2014

ENP Newswire - 30 May 2014

Release date- 29052014 - Bank of England (BoE) Deputy Governor Charlie Bean on Thursday argued that raising interest rates in small steps is the best way to avoid an error.

During a visit to Wales, he said taking larger steps would increase the likelihood of 'getting it wrong'. 'When the Bank Rate does rise - and we don't think there is a case for an immediate rise - we expect it to do so gradually and to a level in the medium term which is likely to be materially below its pre-crisis average of around 5%,' he told Cardiff-based Western Mail newspaper. He said the timing of a rate rise depends on whether productivity improved and reduced the inflationary impact of a pick-up in wage growth. On Sunday Bean, who is retiring as Deputy Governor after 14 years at the bank, predicted interest rates would rise to 3% over the next three to five years. RD

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Source: ENP Newswire

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