Bank of England's Shafik says interest rates likely to rise - Kent Business

(Reuters) - Interest rates in Britain are likely to rise despite inflation falling to zero, Bank of England Deputy Governor Minouche Shafik told Kent Business in comments reported on Wednesday. The policymaker said the main reason behind lower inflation was a rapid decrease in oil prices and the negative effect of an appreciating British pound on UK firms' profits. "If you take out those temporary external factors, the underlying core inflation is not that low," Shafik told Kent Business. She said the central expectation of the Bank of England's monetary policy committee is that the next move will be up, the publication reported. However, Shafik said the central bank will keep its options open, including a possible rate cut in the future, it said. Last week, Bank of England Chief Economist Andy Haldane said the central bank should consider cutting interest rates if inflation threatens to fall further below target than forecast, distancing him from other BoE officials. Inflation in Britain fell to zero last month, official figures showed on Tuesday, as lower prices for food and computer goods left consumer prices unchanged from a year earlier for the first time on record. A representative for the Bank of England could not immediately be reached for comment. (Reporting by Shivam Srivastava in Bengaluru; Editing by Ken Wills)