Bank Of England

Rises in interest rates could become more frequent if inflation and economic growth continue in the coming years, the Bank of England has said.

The Bank kept rates at 0.75% at its latest meeting, but governor Mark Carney said if inflation and the economy follow its forecasts, higher interest rates are inevitable. It comes despite markets forecasting just one rate rise before 2021.

However, he stressed that certainty over Brexit, and a smooth transition out of the EU, would be crucial.

Mr Carney said: "If something broadly like this forecast comes to pass... it will require interest rate increases over that period and it will require more, and more frequent interest rate increases, than the market currently expects."

After seeing global economic growth pick-up, the Bank of England raised its forecast for the UK from 1.2% to 1.5% for the year.

In its latest report, the Bank said "global growth had shown signs of stabilisation, and had been a little better than expected".

Deputy governor Ben Broadbent told the BBC "The market is barely pricing one rise over the next three year.

"One quarter point rate rise per year - I wouldn't describe that as particularly dramatic.

"Indeed as we have said for many of the past few years, we expect the path of interest rates as and when they do go up - that rise to be limited and gradual."

Broadbent, also revealed he is undecided on whether or not to apply for the position of governor of the Bank of England. Earlier in April, Mark Carney announced he will step down from his role on 31 January 2020.