(Reuters) - A Bank of England policy maker said a hike in interest rates in Britain will depend on how the economy performs over the summer and autumn, the Guardian reported.
“Were we to have to go early – and that will depend on how the economy performs over the summer and autumn – I think it would have been damaging if it was portrayed as a surprise. It appeared the markets were more certain of the date of lift-off [for rates] than we were,” Ian McCafferty - a member of the Monetary Policy Committee - told the British newspaper in an interview.
McCafferty said unemployment was significantly higher than its medium-term natural level but added that the economy had come a long way in the last 12 to 18 months and that GDP was now coming back to the level of 2008.
“The economy has grown a little faster than might have been expected at the beginning of the year,” McCafferty was quoted as saying.
His comments echoed what he said earlier in the day during a speech in London.
BoE Governor Mark Carney warned last week that markets had underpriced the risk of an early rate rise.
McCafferty said that he would not disagree with the bank’s outgoing deputy governor, Charlie Bean, who has estimated that rates would settle at around 2.5-3 percent.
McCafferty said he expected the momentum in the pace of growth to continue over the summer.
Reporting by Tasim Zahid in Bangalore; Editing by Robin Pomeroy