UK BASE rates are likely to remain in a range of about 2% to 3% for an extended period, after they do eventually rise from their record low of 0.5%, Bank of England deputy governor Charlie Bean has declared.

He noted financial markets were pricing in the first rise in rates in spring 2015, although he declared the Bank was likely to learn a lot between now and then about the pace of recovery, the amount of slack in the economy, and the impact on costs and prices.

Counselling against "getting too hung up" on the precise date on which the first rise in base rates would come from the Bank's Monetary Policy Committee (MPC), he told the North East Chamber of Commerce in Darlington yesterday: "What, I think, is more useful for businesses to hang on to is our expectation that when Bank Rate does rise, it will probably do so only gradually and to a level that is likely to remain materially below its pre-crisis average of 5% for some while - I have something like a 2% to 3% range in mind here."

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This, he noted, reflected partly the process of private and public sector balance sheet repair continuing to weigh on domestic demand, and recovery in the euro area, the UK's main export market, remaining muted.

Mr Bean said: "At last, there are clear signs that the economy is on the mend."

But he added: "It is still early days and the MPC will be doing its utmost to ensure that recovery is not nipped in the bud."