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Sharp interest rate rises unlikely, says Monetary Policy Committee member

One of the Bank of England's interest rate setters believes sharp rises are unlikely in the near future.

Reuters reports David Miles, a policymaker on the Bank's rate setting committee, told BBC radio that inflation was running at slightly below the 2% target and that wage increases are also low.

He said: "That's very good news because it means that we're not going to be pushed into raising interest sharply, because the inflation outlook remains pretty subdued."

He added that investment spending in Britain had started to increase strongly and he expected that to continue, making for more than a consumer-led recovery.

Miles also said there would be a greater spread of mortgage rates compared with the Bank's official interest rate in future, which was a legacy of the financial crisis.

It means the new 'normal' Bank of England rate is expected to be lower than pre-crisis levels.

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