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Mervyn King warns against interest rate rise
Business digest: Bank of England Governor says higher rate could have ‘severe’ economic impact
The Bank of England governor Mervyn King has warned that any rise in UK interest rates could have "severe" consequences.
"The economic consequences of high-level indebtedness now would become more severe if rates were to rise," he told the European Parliament in Brussels last night. "It is the main reason why interest rates are so low."
His words come on the eve of the Bank of England's Monetary Policy Committee meeting this week, where the country's interest rate is set to be discussed. His comments are taken to indicate that the UK's interest rate will remain at the record low of 0.5 per cent and not rise to combat increasing inflation, as some commentators have called for.
Read a full report at the Daily Telegraph. ·
