BoE's Carney says first interest rate rise "getting closer" - UPDATE

Bank of England Governor Mark Carney has given another warning that an interest rate rise "is getting closer", although he said the timing would depend on economic data.

Carney said in a speech in Wales that the UK economic outlook was much improved and many of the conditions for the economy to normalise had now been achieved.

He added: "The point at which interest rates also begin to normalise is getting closer.

"In recent months the judgement about precisely when to raise Bank Rate has become more balanced. While there is always uncertainty about the future, you can expect interest rates to begin to increase.

"We have no pre-set course, however; the timing will depend on the data."

Carney added that rates would rise gradually and to a limited extent because headwinds facing the economy were
likely to take some time to die down.

He also said demand in the UK's major export markets such as the eurozone remained muted and the government was still battling to repair the public finances.

Carney also referred to relatively high levels of consumer and business debt, saying "a highly indebted private sector is likely to be particularly sensitive to changes in interest rates."

Analysts have speculated that a rate rise could come as soon as later this year, although lower inflation and more downbeat economic data has prompted many to say they are not expecting an increase until early 2015.