Bank of England policymakers would like interest rates to reach a "normalised" level of about 5.0 percent, a member of its monetary policy committee told the Daily Telegraph newspaper on Thursday. The British central bank has left its key lending rate at a record low 0.50 percent since March 2009 as it seeks to aid economy recovery from a record-length recession that ended late last year.
However, MPC member Paul Fisher told the newspaper on Thursday that officials wanted borrowing costs to rise tenfold as soon as possible, given the threat of higher inflation. "We hope people are aware that interest rates at some point will go up again and that they will head back to a normalised position," he said in an interview, adding that a "normalised" level would be "around" 5.0 percent.
"What we need to do is to trigger the mindset in people that that's where rates will eventually go back to," said Fisher, who is the BoE's executive director of markets. The comments surfaced one day after the BoE published the minutes from its most recent December rate-setting meeting. Policymakers were divided again earlier this month, when they chose to keep interest rates at the record low for a 20th month in a row despite building inflationary pressures, according to the minutes.
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