No need to raise rates yet

Bank of England governor Mark Carney said there is “no immediate need” to increase interest rates, as he bolstered officials’ defence of the low borrowing costs they are maintaining.

“The worst of the crisis is behind us, but the financial system is not functioning as well as it could,” Mr Carney said in Davos, Switzerland. “Uncertainty among households and businesses is still preventing investment.”

Mr Carney’s view that tighter policy isn’t yet required repeats comments made in the past 24 hours by fellow Monetary Policy Committee members Paul Fisher and Ian McCafferty. Officials believe the policy should be kept loose to shore up the recovery after unemployment fell faster than forecast toward the threshold at which they have said they may reassess borrowing costs.