Carney rules out imminent base rate increase

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Bank of England governor Mark Carney has dismissed the prospect of an imminent rise in interest rates by revealing that base rate is likely to stay low for the foreseeable future.

Last summer Carney said the decision to raise interest rates would likely come “into sharper relief around the turn of the year”.

But giving a speech at Queen Mary University today, Carney said: “Well, the year has turned, and that decision proves straightforward. Now is not yet the time to raise interest rates.”

Carney says this is a result of the renewed collapse in oil prices, the volatility in China and the moderation in growth and wages in the UK.

The governor says that the future for the bank’s monetary policy hinged on the MPC’s objectives, its strategy and the UK’s economic prospects.

He says: “Our strategy in achieving the inflation target varies over time and depends on the nature of shocks that are hitting our economy and the risks our economy is facing. At present the MPC is seeking to return inflation to target in around two years and keep it there in absence of further shocks.”