Economy

No interest rate hike ‘until autumn 2015’

The Bank of England’s chief economist has hinted that an increase in benchmark interest rates will be delayed due to weakness in the Eurozone economy and the Far East.

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The Bank of England’s chief economist has hinted that an increase in benchmark interest rates will be delayed due to weakness in the Eurozone economy and the Far East.

Economy

No interest rate hike ‘until autumn 2015’

The Bank of England’s chief economist has hinted that an increase in benchmark interest rates will be delayed due to weakness in the Eurozone economy and the Far East.

Share this article

The Bank of England’s chief economist has hinted that an increase in benchmark interest rates will be delayed due to weakness in the Eurozone economy and the Far East.

Analysts said it could mean rates will stay anchored to their historical low of 0.5% until the second half of 2015. Until recently speculation was for a rise before the end of this year.

It is potentially good news for businesses borrowing to invest but bad news for savers. Flat-lining growth in the EU couple with weaker Chinese output will also concern exporters and businesses relying on foreign investment.

In a speech on Friday morning BoE economics chief Andrew Haldane said the UK was experiencing a two-speed recovery with business confidence and investment up but real wages falling.

"I am gloomier," he said during the speech. "This implies interest rates could remain lower for longer, certainly than I had expected three months ago."

Mr Haldane is one of nine members of the BoE’s Monetary Policy Committee, charged with setting UK interest rates every month.

Interest rates have been frozen at 0.5% since March 2009.

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No interest rate hike ‘until autumn 2015’

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