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Bank hints that interest rates could rise


The governor of the Bank of England, Mark Carney, has suggested that interest rates could increase sooner than originally anticipated.

Speaking at the annual Mansion House Dinner he said the increase “could happen sooner than markets currently expect”.

However, he stated that the original increase will be less important as he expects the eventual increases in interest rates to “be gradual and limited”.

New powers

Speaking at the same event, Chancellor George Osborne announced some new plans to stop the housing market from overheating.

These plans included giving the Bank of England new powers, whilst at the same time reforming planning laws to allow for an extra 200,000 homes to be built.

These new powers include capping the size of a mortgage that an individual is allowed to borrow in relation to their annual income or to the value of the home.

He said: “We saw from the last crisis the dangerous temptations for politicians to leave the punch bowl where it is and keep the party going on for too long.”

The chancellor claimed that he wanted to ensure the Bank of England has all the “weapons” it needed to safeguard the housing market and protect homeowners as well as aspiring homeowners.

He then added that whilst he does not believe the housing market poses an immediate threat to the stability of the UK economy, it could do in the future if remained unchecked.

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