Sub 5pc to be “new normal” for interest rates

Miles, who sits on the Monetary Policy Committee, told the Yorkshire Post that the greater cost of mortgages will keep rates below 5%.

Before the crisis mortgage interest rates were only marginally above the BoE’s interest rate but Miles said he thought this might never be the case again.

He said: "If you take the 320-year period since the Bank of England was established in 1694, it turns out the average bank rate was ... 5%.

"There are some pretty strong reasons why what you call the new normal is likely to be quite significantly lower than that."

Miles comments echo those of governor Mark Carney who has previously said Interest rates will probably never reach pre-recession levels, even after the economy fully recovers.

Ian McCafferty, a fellow member of the monetary policy committee, told news agency Reuters on Tuesday that market expectations that the Bank of England will start to raise rates in the second quarter of 2015 are "not unreasonable".

He said: "The exact timing of course is going to depend on events that have yet to unfold in terms of how the recovery proceeds over the course of the next six to 12 months or so."