Bank of England policymaker Kristin Forbes has warned that waiting too long to raise interest rates could damage Britain's economic recovery. Kirsty Basset looks at market reaction to the comments.
The financial world is fixated on when interest rates will go up. And now Bank of England policymaker Kristin Forbes has weighed in. Writing in The Telegraph, she says raising rates too soon could make companies less willing to invest - and consumers less willing to spend. But on the flipside, waiting too long could create its own distortions. The pound gained ground against the dollar and the euro following the comments. FxPro's Chief Economist Simon Smith believes rates will probably go up in February. (SOUNDBITE)(ENGLISH)FXPRO CHIEF ECONOMIST SIMON SMITH SAYING: "We are, as we've seen in the U.S., seeing more debate in the UK on the timing of the first rate move and I think that is positive in that it's making businesses and households aware that rates will be going up likely in the near future and they're hopefully going to moderate and change their behaviour acordingly." Interest rates were slashed to half a percent in 2009 during the financial crisis, and have remained there ever since. And there's not much interest in raising them just yet - only one policymaker out of nine voted for a rate hike at the Bank's August meeting.