Current UK rates still ''stimulating economy''

Bank of England deputy governor Paul Tucker has said that at current levels, UK interest rates are still working to stimulate the economy, indicating that the bank is likely to rise its rate again.

The BoE has raised interest rates by a quarter-point twice since November. Most analysts expect a further move by May, although there is growing speculation the bank could bring this forward to April.

So far, the bank's two rate hikes since November have not dampened consumer spending with recent data showing retail sales and household debt remaining at elevated levels.

Tucker commented today that there is "already some evidence of inflationary pressure". He added that the bank remains "cautious" before hiking rates again given the uncertain effects on inflation, saying that "the marked increases in household debt do somewhat increase that uncertainty".