Bank of England's Ben Broadbent sceptical about interest rates rise

Interest rates
Interest rates

Bank of England deputy governor Ben Broadbent has said he is "not ready" to raise interest rates due to too many "imponderables" in the economy.

His comments sent the pound falling sharply after recent gains for sterling on signs of mounting support among other policymakers for a rate hike to tackle rising inflation.

But Mr Broadbent finally broke his silence on rates, saying it was too difficult to make the call for a hike given the uncertainty in the economy and cautious mood among businesses.

It adds to further evidence of a deepening split on the Bank's Monetary Policy Committee (MPC) ahead of next month's interest rate meeting.

Three out of eight members unexpectedly voted to raise rates to 0.5% from their record low of 0.25% in June due to concerns over soaring inflation.

In an interview with the Aberdeen Press And Journal, Mr Broadbent said: "If you look at the past six to 12 months, economic growth has been okay and the employment rate good.

"Unemployment has drifted down a little ... and inflation is higher.

"There is reason to see the committee moving in that direction (higher interest rates) - but there are still a lot of imponderables."

He said business confidence was key, adding that firms remain nervous about Brexit cautious over the outlook.

He said it was "very difficult for us on the committee to judge" whether there has been a significant improvement in business confidence.

He added: "In my opinion, it is a bit tricky at the moment to make a decision (to raise rates). I am not ready to do it yet."

Sterling dropped 0.2% to 1.28 US dollars and nearly 0.2% to 1.12 euro after the comments.

The pound came under pressure on Tuesday when an earlier speech by Mr Broadbent had failed to address the issue of rates.