The U.K.'s "exceptional" employment performance has come at the cost of salary increases, Bank of England Governor Mark Carney told trade unionists Tuesday.
The central banker explained that although one million more people are in work than there were at the start of the crisis in 2008—wages had fallen by 10 percent in the same period.
The central bank has previously warned any rate hikes would depend on wage recovery.
With this in mind, Carney said on Tuesday that the moment for rising rates was nearing. He said that if the Bank began raising rates in spring 2015, inflation would settle at around 2 percent and a further 1.2 million jobs would be created.
"With many of the conditions for the economy to normalize now met, the point at which interest rates also begin to normalize is getting closer," he said, adding that the precise timing would depend on the data.
"The current inflation environment is benign. But it will not remain benign if we do not increase interest rates prudently as the expansion progresses," he said.
Any rate rises would be gradual and limited.