Rate hike could help recovery

Tim Wallace
Follow Tim
BRITAIN’S economy is strong enough to handle higher interest rates, and would be supported by tighter policy, the Bank of England’s Ian McCafferty said yesterday.

He believes that there may be less slack in the economy than other officials estimate, and has voted for a 0.25 percentage point rise.

“Persistently low interest rates can increase the risks to financial stability,” he warned at an Institute of Directors event yesterday.