Interest rates are going to stay low in the UK for some time to come, the outgoing governor of the Bank of England has warned.
Sir Mervyn King, who is set to be replaced in the role by the Bank of Canada's Mark Carney, revealed "normal" rates are not on the way any time soon.
Interest rates have been at a record low for the UK of 0.5 per cent for several years, but Sir Mervyn indicated this situation could continue for the foreseeable future.
He told MPs comments from US Federal Reserve chairman Ben Bernanke have been misinterpreted. Mr Bernanke appeared to suggest the asset purchasing scheme in the US could be wound down next year as long as the country's economic recovery remains on track.
"Until markets see in place policies to bring about that return to normal economic conditions, there is no prospect for sustainable recovery and without that prospect for sustainable recovery, markets understand that it will not be sensible to return interest rates to normal levels," said Sir Mervyn.
The Bank of England leader has regularly voted for interest rates to rise in recent months, but has failed to win the support of the rest of the Monetary Policy Committee.
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