SINTRA, Portugal, June 28 (Reuters) - The Bank of England is likely to need to raise interest rates as the British economy comes closer to operating at full capacity, and will debate this “in the coming months”, BoE Governor Mark Carney said on Wednesday.
Speaking at a European Central Bank conference in Portugal, Carney said that policymakers would need to look at the extent to which stronger business investment offset a slowdown in consumption, as well as growth in wages and labour costs.
“These are some of the issues that the MPC will debate in the coming months,” Carney said. “Some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional.”
The BoE’s Monetary Policy Committee split 5-3 earlier this month on whether it was time to start to raise British interest rates from a record-low 0.25 percent. Carney voted to keep rates steady.
Writing by David Milliken, editing by Andy Bruce