The UK's base rate of interest could eventually rise to as high as three per cent in the next few years, according to Charlie Bean.
Mr Bean, who is leaving the post of deputy governor of the Bank of England, suggested interest rates could be increased earlier than anticipated. Some commentators have claimed rates will go up in the first six months of 2015, but others say it could be even longer until there is a rise.
Interest rates in the UK have been at a record low for the country of 0.5 per cent since March 2009, despite the country's economic recovery picking up pace in the last few months.
Mr Bean told BBC Radio 4's The World This Weekend he believes there could be economic advantages to increasing the UK's base rate earlier than planned.
He said: "The bank rate averaged about five per cent in the decade or so before the crisis. It's reasonable to think that given the headwinds that are still out there as well as some the global forces that perhaps the level that we go to three or five years out might a couple of percentage points below that."
The last meeting of the Bank of England's Monetary Policy Committee resulted in a unanimous vote to hold interest rates at 0.5 per cent for another month. However, the minutes from the meeting appeared to indicate the group were closely considering a rate rise in the near future.
Mr Bean added: "There's a case for moving gradually because we won't be quite certain about the impact of tightening the bank rate given everything that has happened to the economy."
Increasing interest rates will affect mortgage customers and savers and is likely to have a knock-on impact on the UK's general economic health in the coming years. Fears a rate rise could affect the economic recovery have been forefront in the decision to keep rates at a record low of 0.5 per cent for the last five years.
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