You are here: Home - Mortgages -

Bank ‘won’t be pushed into raising interest sharply’ – David Miles

0
Written by:
14/08/2014
The Bank of England won’t be pressured into hiking the Base Rate quickly because inflation is likely to remain relatively low, according to economist David Miles.
Bank ‘won’t be pushed into raising interest sharply’ – David Miles

Speaking to BBC Radio this morning Miles, a member of the Monetary Policy Committee, which sets the Bank Base Rate, pointed out that inflation is currently below the Bank’s two per cent target, adding:

“That’s very good news because it means that we’re not going to be pushed into raising interest sharply, because the inflation outlook remains pretty subdued.”

His comments follow downbeat wage growth figures released on Wednesday, which showed UK workers earned less in the second quarter of 2014 than they did during the same period in 2013.

The Bank of England governor Mark Carney related the fall in wage growth to slack in the economy, indicating the central bank may take longer to start increasing the cost of borrowing.

Miles said Britons were probably receiving pay rises of around 2% on average, and said that he expected to wages to start outstripping the rate of inflation in 2015.

Miles also suggested that mortgage lenders were likely to charge a higher margin over Bank Base Rate on their products going forward than they have in the past, and that Bank of England Base Rate was likely to run at a “new normal” in future – lower than before the financial crisis.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • @YourMoneyUK I will be travelling to UK from Gran Canaria and im in reciept of pension credit, am i eligible for this payment?
  • Unclaimed money scheme expanded to aid Covid recovery: https://t.co/lQgBdlQJE0 @YourMoneyUK
  • RT @thenutmegteam: Keeping on top of your pension now could well pay dividends in the future. ⏳ Nutmeg's savings and investments specialis…

Read previous post:
Student debt up 14%

The average estimated student debt has increased 14 per cent from last year and now stands at more than £19,000.

Close