Bank of England specialist says interest rates will stay low
HOMEOWNERS can look forward to a lengthy period of record low interest rates despite a recovering economy, one of Britain’s leading economists has predicted.
David Miles, one of nine members of the Bank of England’s rate-setting Monetary Policy Committee, said bankers and stockbrokers are “spectacularly misguided” if they think a rise in the base interest rate from 0.5 per cent is around the corner.
In a staunch defence of the Bank’s new “forward guidance” policy, Mr Miles said a few quarters of upbeat growth do not mean the economy is fixed.
The UK can expect a slow fall in unemployment, he warned.
Bank Governor Mark Carney has said he will not raise interest rates from the low they have been at since March 2009 until unemployment falls to seven per cent from its 7.7 per cent – barring inflation fears.