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Bank of England's Haldane: rates might stick at 3 percent - paper

Published 26/11/2014, 07:36
© Reuters. Pedestrians walk past the Bank of England in the City of London

LONDON (Reuters) - Official interest rates in Britain might end up sticking at 3 percent after they start to rise, below their level before the global financial crisis, the Bank of England's chief economist Andrew Haldane said in an interview published on Wednesday.

"We think that it will be a gradual path once we get started and the levels to which we are likely to head when things normalise are not going to be the same levels we have seen in the past," Haldane told the Bristol Post, a regional newspaper.

"The Bank rate in the past averaged five to six percent. I think for the future we might see rates sticking somewhere below that, maybe three percent."

Bank of England officials have previously said 3 percent might be the normal level of the BoE's benchmark interest rate in the future.

Haldane told the newspaper he did not know when rates would start to rise and that when they did, the Bank intended the increase to be gradual and limited.

He also said some businesses he had visited in the southwestern English city of Bristol had "felt and seen a bit of a tail-off since the summer, with activity in some cases fading away a bit and in some cases fading away quite sharply."

© Reuters. Pedestrians walk past the Bank of England in the City of London

The slowdown in the euro zone "plainly hadn't helped", he added.

(Writing by William Schomberg; Editing by Hugh Lawson and Gareth Jones)

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