IMF urges BoE to keep rates low until recovery 'reaches full momentum'

Households and businesses should be told borrowing costs will remain at rock-bottom levels until the economy is motoring again, the International Monetary Fund has said.

It urged the Bank of England to "provide assurance" interest rates will be "kept low until the recovery reaches full momentum", the Daily Mail reports. The Bank does not offer such forward guidance at the moment but it could start doing so under Mark Carney, the Canadian who succeeds Sir Mervyn King as governor on 1 July. Carney has promoted long-term commitments to low interest rates at the Bank of Canada and has been asked by Chancellor George Osborne to assess whether such a policy would work in Britain. Such guidance could give confidence to borrowers worried about a sudden ris...