London (MNI) – Bank of England Governor Mervyn King told the
European Parliament yesterday that a rise in long-term interest rates
would have “severe” consequences, according to a report in the Daily
Telegraph newspaper Tuesday.
King’s comments come just ahead of the announcement of the Bank’s
rate decision, due on May 5 at 1100GMT.
Addressing the issue of interest rates across the continent King
said that the effects of high-level indebtedness would worsen were rates
to rise.
“The economic consequences of high-level indebtedness now would
become more severe if rates were to rise…It is the main reason why
interest rates are so low,” he said.
Speaking in his capacity as deputy chair of the European Systemic
Risk Board (ESRB) at an event at the European Parliament in Brussels,
King said that it would take several years for Europe to recover from
the financial crisis.
“The economic challenges will last for many years…The financial
crisis is far from over,” King said.
–London newsroom 0044 20 7862 7492; email: ukeditorial@marketnews.com
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