At their April meeting, the Bank of England's rate-setters warned that if economic growth continues apace, productivity must improve or inflation will rise.That raises an alarming possibility: interest-rate rises even as productivity and real wages continue to stagnate.
He talked about the possibility of interest rate rises beyond the already sky-high 10% and the need for further interventions by the Bank of England.
He added: "This is a man who has got it wrong on the economy at every stage - whether it has been short-selling, Bradford and Bingley, Northern Rock or the possibility of interest rate cuts.
Still, she underscored that banks still had plenty of work ahead as they contended with an anemic economy, still-fragile housing market and the possibility of interest rate shocks in the months ahead.
But this raises the possibility of interest rates starting to go up next year.
Jan Vlieghe, one of the Bank's nine rate setters, floats the possibility of interest rates being cut below zero.
Santander also listed the risks to its business, including the possibility that interest rates are cut to below zero.
"Given still-high debt levels, a number of consumers may still be worried by the possibility that interest rates will rise before long," he said.
In April, Jan Vlieghe, a member of the Bank's nine-member monetary policy committee (MPC), floated the possibility of interest rates being cut below zero, meaning companies would pay to deposit their money with banks.
He left open the possibility that interest rates could fall further, but refused to say whether members of the bank's Governing Council discussed a rate cut when they met on Thursday.
The drop in the number of people out of work was bigger than many analysts had predicted, raising the possibility that interest rates may rise sooner than expected.
