Andy Haldane, Chief Economist at the Bank of England (BoE) has stated that a rise in interest rates would be ‘good news’, as it would serve as a sign that the UK economy is ‘healing’.
The base interest rate currently stands at 0.25%. Interest rates could be raised over the coming months, and the BoE has indicated that they could rise as soon as November.
Mr Haldane commented: ‘In the September minutes in particular, a majority of the committee – of which I am one – said that we could be nearing the point where a reduction in some degree of monetary stimulus might be warranted in the coming months.
‘And let’s be clear here: for me that would be a good news story. This would be interest rates getting back to normal, even if the new normal is different to the old normal.
‘This would be a sign of the economy healing, and therefore adjusting to that healing process.’
However, economists believe that an increase in interest rates could potentially harm the economy. Weak economic readings and uncertainty generated by Brexit will hamper growth, experts have predicted.