Asahi Associates: Bank of England Governor, Mark Carney, says the time for normalization of interest rates is approaching.

Asahi Associates: UK interest rates may rise in Spring 2015 as the country's economic recovery gathers momentum and wage settlements increase according to Mark Carney, Governor of the Bank of England.

Britain's economic growth has been the most robust of all the advanced nations thanks to massive quantitative easing and a number of government stimulus measures designed to kickstart the economy in the run up to a general election next year.

€There's no doubt that there's been a pickup in economic activity but, in our view, any rate hike will be symbolic. One only has to look at historical interest rate levels in the UK to realize that a 25 basis increase from all-time lows is nowhere near what anyone could call a €normalization',€ said an Asahi Associates analyst.

Mr. Carney was speaking at the annual TUC conference in Liverpool where the central theme is €Britain needs a pay rise€.

€Many people in the UK are only earning slightly more than they were at the beginning of the financial crisis in 2008 but prices for food, energy, fuel and real estate have soared in comparison and consequently, consumers are relying more heavily on credit to supplement their incomes,€ explained the Asahi Associates analyst.

Carney is approaching his first anniversary as governor of the BOE, a period that began with the introduction of forward guidance as a policy tool. Treasury Committee member Pat McFadden highlighted that in the past year, Carney's guidance has moved from indicating the first rate increase in 2016 to comments that investor bets for 2015 might even be an €underestimation.€

€It strikes me that the bank's behaving a bit like a sort of unreliable boyfriend,€ he said. €One day hot, one day cold and the people on the other side of the message are left not really knowing where they stand.€

The firm says it remains to be convinced of the sustainability of the UK recovery arguing that it is based on easy credit and even mildly higher interest rates will result in a significant numbers of debtors finding themselves in acute financial difficulty.

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