A member of the Bank of England’s key Monetary Policy Committee says waiting too long to raise interest rates risks undermining the UK's recovery, in the latest hint that base rate may rise soon.
Kristin Forbes, writing in the Daily Telegraph, says a rate increase takes one to two years to take full effect so an increase - or a number of increases - would be need "well before" inflation hit the Bank of England's profession two per cent target.
"Waiting too long would risk undermining the recovery - especially if interest rates then need to be increased faster than the gradual path which we expect," she says.
Forbes is a relatively new member of the nine-strong MPC - the body which sets interest rates on behalf of the Bank of England - but her views echo those of fellow MPC member David Miles who last week said there was justification for beginning “the journey” of increasing interest rates.
Forbes says Sterling's strength, combined with drops in energy and commodity prices, would keep inflation low for the immediate future and gave the MPC "a bit more time" but she adds: "There is no need to act before we are confident that inflation is heading back toward two per cent within about two years as expected."