The Bank of England's chief economist has said interest rates may need to rise this year, citing slower economic growth and continuing inflationary pressures.
Key facts
- The Bank of England's chief economist said interest rates may need to rise this year.
- Slower economic growth was cited as a factor.
- Inflationary pressures were also cited as a reason for a possible rate rise.
- The comments were reported by the BBC.
The chief economist at the Bank of England has said that interest rates may need to rise this year, pointing to a combination of slower growth and inflationary pressures, according to the BBC.
The remarks suggest that policymakers at the central bank are weighing the risks posed by rising prices against signs of a slowing economy as they consider the future path of borrowing costs.
According to the BBC, the chief economist indicated that inflationary pressures were among the reasons that a rate rise could be warranted in the coming months.
At the same time, the economist noted that economic growth had slowed, a factor that is typically taken into account by the central bank when setting rates.
The comments offer an insight into the thinking of a senior figure at the Bank of England at a time when households and businesses are closely watching the direction of interest rates.
Why it matters
Interest rate decisions directly affect the cost of mortgages, loans and savings for millions of households and businesses. A signal from the Bank of England's chief economist that rates may rise gives an early indication of the pressures policymakers are weighing as they balance inflation against slowing growth.
Frequently asked questions
Why might interest rates rise this year?
According to the BBC, the Bank of England's chief economist said that slower growth and inflationary pressures mean a rate rise may be needed.
Who made the comments?
The comments were made by the chief economist at the Bank of England, as reported by the BBC.
Has a rate rise been confirmed?
No. The chief economist said rates may need to rise this year, but the source does not confirm that any decision has been made.