Bank of England says rates may have bottomed

British interest rates will probably not come down any further if the world economy grows in line with the Bank of England&#39s forecast, the central bank&#39s deputy governor Mervyn King says.

And Governor Sir Edward George repeated his warning on Tuesday that the BoE might even have to raise borrowing costs if consumer demand did not slow as expected, but stressed that the MPC might have to cut interest rates if the world economy took a turn for the worse.

But policymakers are worried that consumer debt levels are getting out of control and held off from cutting rates earlier this month for fear of stoking borrowing and house prices any further.

Asked by parliament&#39s Treasury Select Committee if interest rates had bottomed, King replied: “If the world were to evolve as in our central view, that would probably be a reasonable view.”