Carney indicates interest rates may rise at ‘turn of year’

Bank of England governor Mark Carney has indicated that UK interest rates could rise “at the turn of this year”.

In a speech he said that he expected rates to rise over the next three years, reaching “about half as high as historical averages”, or about 2%.

But he added that shocks to the economy could change the timing and the size of any rate rise.

Interest rates have been at 0.5% for six years as the UK economy recovers from the financial crisis.

The Monetary Policy Committee will “have to feel its way as it goes,” Mr Carney said in a speech at Lincoln Cathedral.

‘Proceed slowly’

He added: “Short term interest rates have averaged around 4.5% since around the Bank’s inception three centuries ago.

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