BoE's Broadbent says no urgency to raise rates
Bank of England Deputy Governor Ben Broadbent said he saw no urgent need to raise interest rates, adding to signs from the central bank that a rate hike is likely only in 2016. The Bank's rate setters this week voted 8-1 to keep interest rates at a record low of 0.5 percent, the BoE said on Thursday. The result surprised some investors who had expected a big- ger split, which would have given a stronger signal that Britain's first rate hike in nearly a decade was coming soon.
"As I saw it, I didn't think there was any urgency to raise interest rates right now," Broadbent said in an interview with BBC radio broadcast on Friday. While wages have risen more quickly in recent months, there was not yet much inflationary pressure, Broadbent said. The time for a first rate hike was getting closer as Britain's economic recovery continued but the central bank still believed it was some way off, he said. "We expect to be some way away (from a rate hike)," Broadbent said. "We are clearly closer to the time at which rates may have to go up, but that does not mean we're fixing some particular point in the future." He said BoE Governor Mark Carney had not given an explicit message about a late-2015 rate hike in a speech last month, contrary to some media reports which interpreted it that way. Carney said on July 16 that the decision about when to start raising rates "will likely come into sharper relief around the turn of this year." Broadbent said on Friday it would be foolish to pre-announce when rates would change.