The Bank of England's Monetary Policy Committee is very unlikely to raise interest rates next year, policymaker Spencer Dale said on Friday.
Answering questions on the micro-blogging site Twitter, the BoE Chief Economist said, "I think it's very unlikely that we will raise Bank rate in 2014. We need to see sustained period of strong growth."
In an interview to the U.K. daily Guardian, published on Thursday, Dale said a rate hike could be "conceivably" in 2014, if there was strong than expected growth and weak productivity.
Dale was answering questions on the Bank of England's official Twitter channel. He said low interest rates and quantitative easing have supported the economic recovery and prevented a much worse outcome. Further, he said QE has supported real output by raising asset prices, reducing interest rates and boosting private spending and it will be unbound with great care.
Dale asserted that rates will only rise when there was a sustained period of strong growth and as long as there was no risk to stability.
In August, the central bank said it will leave rates unchanged until unemployment came down to 7 percent. Dale pointed out that the MPC made it clear that forward guidance will be knocked out if inflation expectations were not stable.
"7% unemployment is threshold not trigger. Bank Rate depends on economic outlook," he said.
Further, Dale said subdued wages and housing market indicate that the knockouts to the forward guidance are unlikely to be triggered 'just yet'.
The rate-setter noted that real incomes are weak and rising utility costs might squeeze them further. "Wage growth, including bonuses, remains very weak," he said.
Dale also said that though a healthy housing market is good for the economy, policymakers are watching it carefully for overheating.
He also hoped that the U.S. would reach a longer-term agreement soon on the debt ceiling. That said, the Bank of England remains vigilant to the risks, he added.
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