MNI BRIEF: BOE Saunders: Rate Could Rise In 'Next Year or So'

Dependant on economic conditions, the first UK rate hike could come in the next 12 months or so, Bank of England Monetary Policy Committee member Michael Saunders said Tuesday. Saunders, who voted to end asset purchases at the last meeting, said in an Intuit video session he made clear that he is now contemplating rate hikes in the near future.

"If the economy continues to recover and inflation shows signs of being more persistent then in might be right to think of interest rates going up in the next year or so," he said. He stressed that the policy rate, currently at 0.1%, would not have to rise far as the neutral, or non-expansionary or contractionary, level is exceptionally low.

"Any rise in interest rates in the next year or so should be relatively limited given that a neutral level of interest rates is much lower than it used to be and it is not clear that you would even need to get back to neutral," Saunders said.