Newspaper article The Evening Standard (London, England)

Carney RULES OUT INTEREST RATE RISE; Homeowners Get Boost as Bank Chief Says: Now Is Not Yet Time for Increase Governor Warns Economy Will Be 'Buffeted'

Newspaper article The Evening Standard (London, England)

Carney RULES OUT INTEREST RATE RISE; Homeowners Get Boost as Bank Chief Says: Now Is Not Yet Time for Increase Governor Warns Economy Will Be 'Buffeted'

Article excerpt

Byline: Joe Murphy Political Editor

MILLIONS of homeowners breathed a sigh of relief today as Bank of England governor Mark Carney ruled out an early rise in interest rates.

Speaking on a day of alerts about the fragility of the global economy, he ruled that "now is not yet the time" to end the era of ultra-cheap borrowing.

Mr Carney did not put a timescale on when base rates would rise from the historic low of 0.5 per cent, introduced in 2009. He said only that the Bank would act "at the right time".

His message came as jitters increased over the state of the Chinese economy and the impact this could have on the UK's growth.

China's economy, the second largest in the world and the biggest driver of global expansion, fell back to its slowest growth for 25 years. Official figures said it expanded 6.9 per cent in 2015, compared with 7.3 per cent a year earlier and Beijing's official target of "about seven per cent".

The International Monetary Fund warned that global growth could be "derailed", saying a combination of slower Chinese growth, commodity price changes, higher US loan rates and a "generalised slow-down" in emerging economies posed risks. "If these key challenges are not successfully managed, global growth could be derailed," it said.

Announcing the IMF's cut in growth forecasts, economic counsellor Maurice Obstfeld said: "We may be in for a bumpy ride this year, especially in the emerging and developing Continued on Page 2 Continued from Page 1 world." UK inflation rose, with the Consumer Prices Index hitting an 11-month high in December of 0.2 per cent, up from November's 0.1 per cent, according to the Office for National Statistics. City eyes were on Mr Carney as he gave a partial answer to the question of when the UK would follow the example of the US and increase the cost of borrowing, including mortgages.

Last summer the Bank governor promised things would become clearer "at the turn of this year", and in a lecture at Queen Mary University, London, he said it was plainly too soon. …

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