Carney hints at interest rates rise before end of year

By Natasha Adamson

Comments by the Bank of England governor, Mark Carney, suggest that interest rates could increase before the end of this year.

Economists and analysts were largely of the opinion that interest rates would remain at their record low of 0.5 per cent until at least the early part of 2015, however a speech by Mr Carney has paved the way for an increase before the end of 2014. Speaking at the annual Mansion House dinner in London Mr Carney said an increase "could happen sooner than markets currently expect." He did say that there was "no pre-set course" on the future of interest rates but added that the decision to implement an increase was "becoming more balanced."

Mr Carney has previously sought to reassure that increases to the rate of interest would be slow and gradual, but mortgage borrowers will nonetheless be concerned that a rise could be on the cards earlier than expected. Recent research suggests that a third of first time buyers would struggle to meet their monthly mortgage payments if interest rates were increased.

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