Bank of England governor Mark Carney has said policymakers are in no rush to raise interest rates amid a weakened world economy and slowing UK growth.
He said “now is not yet the time” to hike rates from their historic low of 0.5% following turmoil in financial markets as oil prices have plunged and China’s economic slowdown has spooked investors.
In a speech at Queen Mary University of London, Mr Carney said a rise in UK rates will “depend on economic prospects, not the calendar”.
The outlook has changed dramatically since last summer’s prediction that the decision to raise rates would come into sharper relief at the turn of the year, he said.
He added: “The world is weaker and UK growth has slowed.
“Due to the oil price collapse, inflation has fallen further and will likely remain very low for longer.”
He said “unforeseen disturbances” meant the path for interest rates “cannot be preordained”.
“That means we’ll do the right thing at the right time on rates,” he said.