“[The increased speculation about interest rate rises is a] welcome sign that the economy is returning to normal”, he said at the BoE press conference He added that the time for a rate hike was “drawing closer” but any decision would be “data dependent”. However, he also emphasised that future rises will be slow, towards half the historical averages, meaning around 2%.

The Bank said the central estimate of the MPC was that there remains slack of 0.5 per cent of GDP in the economy, unchanged since its report in May, although it stressed that there was a “range of views” on this subject on the committee. The Bank of England’s economists recent found that American swap rates were responsible for a number of movements in UK mortgage rates.

INTEREST rates could stay at their historic low until next year, as inflation threatens to fall again. “But with inflation now expected to be a little weaker, and productivity somewhat stronger, the Bank’s policymakers do not think a rate rise is in any way imminent – nor is it likely to happen before the end of 2015″. The surprise 8-1 result prompted markets to push out their bets on a first rate increase. However the exact timing of the first move cannot be predicted in advance. In addition to noting the currency’s move in the past three months, most officials saw a risk that this could weigh on inflation for a “persistent period”.

“The combined weakness in domestic costs and imported goods prices is evident in subdued core inflation, which on most measures is now around 1 percent”, a Bank of England inflation report statement said.

Governor Mark Carney announced the figures on Thursday, when for the first time since 1997 the BoE released its quarterly inflation report, the minutes of its Monetary Policy Committee (MPC) meeting and its interest rate decision at the same time.

But yesterday he somewhat changed his tune.

But with inflation still at zero, the majority of the committee is tipped to hold off voting for a hike until early next year. Anyone trapped on a tracker deal needs to work out how much more they’ll need to shell out once interest rates rise and start budgeting.

Bank of England Governor Mark Carney was speaking on Thursday after the release of the latest interest rate decision and inflation data.

Commentators now believe it is unlikely there will be an interest rate rise this year, with markets anticipating an increase next February at the earliest.