Business

Bank of England says rate rise unlikely in 2014

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Media captionHugh Pym on Tweeting at the Bank of England

The Bank of England's chief economist, Spencer Dale, says economic conditions are unlikely to improve enough to merit a rise in interest rates next year.

In a question and answer session on the social network Twitter, he said the UK would need to see sustained growth before rates rose from the 0.5% level.

Earlier this week he said that rates could rise in 2014 if conditions were strong enough.

Mr Dale is one of the nine people at the Bank that set monetary policy.

As might be expected from a central banker, Mr Dale gave little in the way of surprises in his answers on current monetary policy.

In its latest minutes, the Bank's Monetary Policy Committee (MPC) said it would make no change to the £375bn of monetary stimulus it is providing through its quantitative easing (QE) programme.

The programme, brought in to give an extra stimulus because interest rates could barely be cut below the current record low of 0.5%, has been criticised by some for helping the financial markets and the banks, by making money cheap, rather than the economy as a whole.

Gold brick

Many questioners wanted to know about QE.

Asked "is Quantitative Easing a necessary evil? What will be the implications on the UK's macroeconomic objectives?", Mr Dale replied:"QE not evil. Has helped to support economy and protect jobs."

Another of the big economic debates in the country is whether or not house prices are rising dangerously high.

When asked if he had any concerns that there was a housing bubble, fuelled by the Help to Buy scheme which helps borrowers struggling to raise a deposit, Mr Dale answered: "A healthy housing market is good for economy. But watching carefully for overheating."

Twitter's unfiltered nature inevitably draws offbeat comments.

Of less importance to UK economy watchers was "do you ever polish the gold 1Kg brick in the museum?" "No need," was the reply, "It stays shiny without out being polished."

But questions to Mr Dale answered in the hour-long session were markedly more serious and respectful than the session held by British Gas on Thursday, which was widely hailed as a lesson in how not to engage through social media.

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