Bank of England (BOE) was on course to raise interest rates early next year, the bank's governor Mark Carney signaled Tuesday in his clearest statement yet on the probable timing of rate hike.
The rate at which wages rise over coming months will be key to the exact timing of the first move, Carney said in a speech to labor union members in Liverpool.
"Our latest forecasts show that if interest rates ... beginning to increase by spring, the inflation would settle at around 2 percent by the end of the forecast and a further 1.2 million jobs would have been created," said Carney.
Carney repeated that the rate rises can be expected to be gradual and limited compared to the experience of Britain in the past.
Britain's economy gained momentum since this year. The unemployment rate fell to 6.4 percent, over 800,000 jobs have been created in the past year alone. In this background, Carney believed that the interest rates begin to normalize was getting closer.