Outgoing Bank of England Governor Mervyn King said that markets have "jumped the gun" about when central banks are likely to start raising interest rates after the U.S. Federal Reserve signaled a timetable for ending its bond purchases.
Yields on U.S. and other government debt leaped last week when Fed Chairman Ben Bernanke said the U.S. central bank might start reducing its bond buying later this year and possibly end it by mid-2014.
King said the markets had overinterpreted these comments.
"I think people have rather jumped the gun thinking this means an imminent return to normal levels of interest rates. It doesn't," he said in his final appearance as governor before parliament's Treasury Committee on Tuesday.
"The Federal Reserve has merely said that the easing, in which it is still engaging, may taper at some point depending on economic conditions."