'No urgency to raise rates' despite low oil price boost to economy


The fall in oil prices has boosted the economy although there is "no great urgency" to raise interest rates, the Bank of England deputy governor has said.

Ben Broadbent said the drop in global oil prices by 75% had been a "net good" for the British economy, with improvements including a rise in real wages by just over 7%.

However, despite the encouraging signs, there is no rush to increase interest rates from 0.5%, he said.

Bank of England governor Mark Carney announced on Thursday that the rate would stay at the level it has been since March 2009.

There is "certainly no great urgency to raise rates at the moment", Mr Broadbent told BBC Radio 5 live's Wake Up To Money programme.

He added: "We will respond to events as and when they happen."

There had been an overall benefit from the bottoming oil prices, which have been declining since mid-2014, he said.

As oil prices have slumped real wages have increased, rising at their fastest rate in close to 15 years, he explained.

"A lot of that has to do in the drop in oil prices. That's boosted consumption and UK growth overall," he said.

Mr Broadbent suggested that the economy's road to recovery only began in earnest in 2013, as the eurozone crisis of three years ago undid a lot of the progress made since 2008.

There had been "pretty solid growth certainly in the labour market since (2013)", he said.