Interest Rates Likely to Rise, Says George Osborne
Chancellor George Osborne has revealed that interest rates are more likely to rise than fall, due to the success of the UK and US economies.
Osborne has been touring China to establish closer political and business ties.
On Tuesday, he told BBC Radio 4’s Today show that an increase in interest rates, suggested by the Bank of England (BoE) governor, Mark Carney, reflects the “robust growth” of Britain’s economy.
The BoE’s chief economist, Andy Haldane, recently indicated that interest rates might remain low, partly due to the slowdown in the Chinese economy.
Osborne said Britain has “the right people to make the call”, adding, “the governor has signalled, I think pretty clearly, the direction interest rates are heading”.
He also mentioned that the Federal Reserve has defied expectations by keeping interest rates down due to the decline in Chinese stocks.
He said that interest rate setters “are always going to be sensitive to what is going on at that moment, but the general signal coming from the Bank and Federal Reserve is, because the economies have been growing robustly in the last couple of years, the exit from very loose monetary policy is going to come”1.