BoE's Forbes says rates will need to rise despite current low inflation

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25 Mar11:39 PM

[LONDON] Britian's low rate of inflation is unlikely to persist, so interest rates will need to rise as the economy recovers, Bank of England policymaker Kristin Forbes said on Wednesday.

"The current period of low inflation is most likely to be temporary, and will not therefore generate the negative consequences of persistently low inflation which would merit concern," she wrote in London Evening Standard newspaper.

She also said there was a "very good chance" that inflation would fall again next month, turning negative. If low inflation persisted unexpectedly, the BoE could cut interest rates below their record low 0.5 per cent, she added.

REUTERS