Mary Carney, The Bank of England Governor, has given another indicator that interest rates could rise in the coming months, despite continued pressure on the economy.
Mark Carney suggested that it was time for the bank to “ease its foot off the accelerator”, suggesting that a rise in interest rates may be likely coming the Monetary Policy Meeting scheduled for November.
“If the economy continues on the track that it’s been on, and all indications are that it is, in the relatively near term we can expect that interest rates will increase,” he said in an interview with BBC’s Radio 4 Programme.
“What we’re worried about is a pocket of risk – a risk in consumer debt, credit card debt, debt for cars, personal loans,” He added, noting the reasons the bank took into consideration for the upcoming decision.
This comes in spite of Britain’s economy recording its weakest annual growth rate since 2013 for the three months to the end of June, according to the latest from the Office for National Statistics (ONS).
The ONS figures revealed that the UK economy grew at just 1.5 percent a year across the period, marking a slower pace than previously anticipated.
This will no doubt prove a setback for the Chancellor, Philip Hammond, who is set to deliver his Autumn Budget in November.
Nevertheless, Carney remained cautiously optimistic about the strength of the British economy, noting the strength of recent retail figures and the unemployment rate, which is currently at a 42-year low.
Chris Williamson, the chief business economist at IHS Markit, said: “It would be unprecedented for the central bank to tighten policy with the data pointing to such anaemic economic growth. However, policymakers continue to fuel expectations that interest rates will rise soon in response to higher than expected inflation.”
The Bank of England is set to meet to discuss its monetary policy in November.