Carney: Rate hikes will be 'gradual' and 'limited'

Inflation key driver

Bank of England governor Mark Carney has said he expects interest rate increases in the UK to be "gradual" and "limited" as he estimated inflation will remain above 2% for the next three years.

In a speech to the International Monetary Fund (IMF) in Washington DC, Carney said there would likely be "some withdrawal of monetary stimulus" in order to bring inflation back to the BoE's 2% target, according to the BBC. Inflation beat expectations in August rising 0.3% to 2.9%, its highest since 2012, as it continued to feel the effects of the sterling devaluation following the UK's vote to leave the European Union last year. In the Monetary Policy Committee last week, the MPC held rates at 0.25% but minutes revealed "slightly stronger than anticipated" UK economic growth could lea...