BofE's Dale sees low rates for 'sustained period' - BBC

Reuters
A wooden carving of the Bank of England logo is seen on a desk during the bank's quarterly inflation report news conference at the Bank of England in London
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A wooden carving of the Bank of England logo is seen on a desk during the bank's quarterly inflation report news conference at the Bank of England in London November 13, 2013. REUTERS/Toby Melville

LONDON (Reuters) - The Bank of England will keep interest rates low for "a sustained period", the central bank's chief economist Spencer Dale said on Thursday, echoing other top policymakers who have sought to counter speculation about an early rate rise.

Dale, who sits on the Bank's nine-member Monetary Policy Committee, told the BBC it would take "a number of years" before the British economy got back to normal.

"We had a very deep recession, we have a number of years where the economy hasn't grown. I think we will need to see a number of years of strong, sustained growth until the economy starts to feel more normal again," he said.

"I expect us to keep interest rates low for a sustained period until we have seen a sustained period of strong growth, higher levels of output, firms' orders books filling up, levels of unemployment falling."

The BoE took a new approach to coaxing Britain's economy back to growth in August when it said it would not consider raising record-low interest rates until Britain's unemployment rate fell to 7 percent.

Since then, unemployment has come down faster than the BoE had expected, raising questions about the duration of its interest rate pledge. Last week, the BoE said unemployment might fall to 7 percent as soon as the fourth quarter of 2014, far sooner than it predicted in August.

BoE Governor Mark Carney and other top officials have stressed that the 7 percent level is not an automatic trigger for a rate hike.

Dale said the Bank was keeping a close eye on rising prices in Britain's housing market but there was no sign of a bubble.

"We know from the past ... that the housing market can quickly go from normal levels to overheating. I don't think that's where we are now but we are fully aware of the risk of that and we are looking at that very carefully," he said.

(Reporting by William Schomberg, Editing by Belinda Goldsmith)

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