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Interest rate hike could come in new year, says Carney

By John-Paul Ford Rojas

Bank of England governor Mark Carney has reiterated his view that the decision on an interest rate hike "will come into sharper relief around the turn of the year", despite an increase in risks from the global economy.

Mr Carney said turbulence from outside the UK had "intensified" after a period in which markets had been convulsed by fears of a slowdown in China.

But he told MPs on the Treasury Select Committee that the UK was experiencing "robust" growth despite weak global expansion and that a decision on a rate rise would crystallise should this continue as expected.

Mr Carney pointed to an expected scenario of continued growth in gross domestic product as well as wages and a firming-up in underlying inflation.

He said: "Then the decision comes into sharper relief and it may become appropriate to begin to withdraw stimulus."

An increase would mean higher repayment costs for borrowers but provide some relief for savers.

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