The governor of the Bank of England has ruled out an immediate rise in interest rates because of the turmoil in the global economy and weaker UK growth.
In a gloomy assessment of the state of the world, Mark Carney said that collapsing oil prices and an “unforgiving” global environment meant that tighter monetary policy was not yet necessary.
Mr Carney’s assessment comes six months after he suggested that a rise in interest rates would come into “sharper relief” at the beginning of 2016.
Mark Carney – Governor, Bank of England
Many assessed that as a signal that rates would start rising early this year – a relief for savers who have struggled with historically low interest rates since the financial crisis.
Rate rises now seem a more remote prospect, with many economists predicting no change in interest rates until the second half of the year or even into 2017 – despite Mr Carney warning as long ago as the 2014 Mansion House speech that rate rises might be approaching.
That will come as good news for mortgage holders – but not for savers.
Source: BBC News