The Governor of the Bank of England has been giving a lot of hints about a rise in interest rates, but he has not set a date or a level.
Mark Carney has said increases in the Bank Rate, once they begin, will be at a more “gradual and limited” rate than in the past.
The reason for the slower approach to interest rate increases was, Marc Carney, said due to the “headwinds” still facing the British economy.
The Bank rate has been held at its historic low of 0.5pc since 2009.
He said that historically low interest rates threaten the housing market, which could 'tip the economy' into recession because people reduce their spending in order to pay their mortgages.
"History shows that British people do everything they can to pay their mortgages. That means cutting back deeply on expenditures when the unexpected happens. If a lot of people are highly indebted, that could tip the economy back into recession."
He warned that a dangerous housing bubble could develop if interest rates are kept at their historic lows for too long.
He said that the housing market poses a threat to "everyone from Land's End to John O'Groats, including those that do not own their homes.
