Bank's Fisher says that tighter policy could be years away

The Bank of England's Paul Fisher has cautioned that tighter monetary policy may be "years away in the UK".

Fisher said that unwinding from loose policy would likely begin with higher rates, before he set out an exit from gilt sales:

We would only start when we thought we could maintain a programme of sales for a good long period.

We’ve suggested maybe six months at a time, it would take much more than six months to unwind.

Robert Stheeman, chief executive of the Debt Management Office:

I wholeheartedly endorse a rules-based approach to sales.

My guess is that before the bank raises rates, you will have seen yields move up.

In a rising rate environment, the entire economy, including savers, including mortgage holders, will be affected.

Fisher warned that when the US Federal Reserve exits its policy of quantitative easing, there will be spillover effects in the UK.

He said that discussion of US tapering - a reduction in the rate at which the Fed increases the size of its balance sheet - has been a "destructive episode" as mere hints of policy changes have caused a great deal of market volatility.