HOMEOWNERS have been given an assurance that interest rates will not rise from their current record low in the near future.

Rate-setter Ian McCafferty has warned the economy needs to improve before they can increase from their current level of 0.5 per cent.

His comments in a radio interview last night follow recent suggestions that the rates - which have not risen for five years - may go up next spring.

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Mr McCafferty, who sits on the ­Monetary Policy Committee of the Bank of England, which sets rates each month, believes maintaining the status quo will allow economic conditions to "grow a little further" before any changes are made.

Bank of England Governor Mark Carney has indicated that rates will not rise until next year.

Mr McCafferty told LBC Radio: "The time when it becomes appropriate for interest in the UK to start to rise back to a more normal level is approaching.

"But we've also said, one, that we think there is scope for the economy to grow a little further before we really get to that point and, secondly, once we get to that point and thereafter then any rises in interest rates that we anticipate we hope will be only gradual for quite some time to come.

"What we have said, what we said in the last minutes that were published, was that the decisions were becoming more balanced."

He added that 12 months ago the economy was "flat on its back" but that growth had taken hold, pushing unemployment down and bringing about "modest" wage rises.

He said the situation was more ­optimistic "after a year of relatively strong growth in which we have seen a sharp fall in unemployment and some very modest improvement now in ­nominal pay scales, although that's still very modest".

He added: "The view amongst the committee is that, given the depth of the recession and the loss of GDP that we faced over the course of the crisis and the ensuing recession, we can still see the economy running a little bit longer."

There have been warnings that even a one per cent rise could push many households into mortgage arrears.