BOE Carney Expect Interest Rate Increases Relatively Near Term

By David Robinson

     LONDON (MNI) - Bank of England Governor Mark Carney in a BBC Radio

interview said that the "speed limit," the growth potential, of the economy has

declined and he anticipated interest rate increases.

     Carney said that, assuming the economy continued to evolve as expected,

then the Monetary Policy Committee would ease stimulus.

     "If the economy continues on its current path "in the relatively near-term

you can expect interest rates will increase somewhat" Carney said.

     "We are talking about easing a bit off the accelerator to keep with the

speed limit of the economy," he added.

     What matters for potential growth is productivity growth and the size of

the labour force, and both have been under downward pressure, Carney said.

     He defended existing monetary and financial policy arrangements.

     While the UK does not have a debt bubble the Financial Policy Committee has

identified "some issues on household debt ... (and) We have taken action on

those," Carney said.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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