TheBank of England warned that interest rates might rise as early as next year as its chief economist said Threadneedle Street's desire to keep borrowing costs low for several years could be thwarted by a combination of stronger than expected growth and unusually weak productivity.
Spencer Dale, one of the nine members of the rate-setting monetary policy committee, said the UK was currently growing at an annual rate of 3-4% and the Bank could not be certain when it might need to tighten policy.
The Bank said in August that unless there was a risk from inflation or an over-heating property market it would only start thinking about raising interest when unemployment had come down to 7% from 7.7% currently, something it did not expect until 2016. But the recovery in the economy seen since the spring has left many in the City convinced that the Bank will be forced to take action before then.
Source: theguardian
