Bank of England in no rush to hike rates

The Bank of England is in no rush to raise interest rates next year, rate setter Martin Weale has said.

He said a surprise pause in wage growth and falling oil prices are likely to make the Monetary Policy Committee (MPC) more cautious.

This is a change from September when Weale wrote that the Bank would have to lift rates soon to combat inflation.

But he struck a more downbeat tone in an interview with the Daily Telegraph, saying that low inflation has given the Bank more breathing space.

Weale said: “I initially thought that the weak wage growth was a wobble that represented stray numbers that you get once or twice from time to time. 

“There has plainly been something more to it than that.”

Weale pushed in vain in late 2014 for higher borrowing costs and was expected to fellow policymaker Ian McCafferty in voting for rates to rise from a record low of 0.5%.

Governor Mark Carney has also played down the prospect of rate rises in the near future.  

Financial markets currently believe the Bank of England will raise rates in late 2016 or early 2017. 

At its last meeting the MPC held rates by a majority of eight to one.