Back to normality. The Governor of the Bank of England has signalled tonight that the era of record low interest rates is soon to end.
The Bank of England delivered its quarterly update today and the message from the governor on the economy was 'steady as she goes'.
The deputy governor of the Bank of England has made its strongest warning yet of the dangers that could be brewing in the housing market.
UK borrowers should expect interest rates to return to their pre-recession levels of around 5 percent within a decade, according to the outgoing Bank of England deputy governor for monetary policy.
Sir Charlie Bean who leaves his job tomorrow, said market expectations that the first increase in interest rates would come at the turn of the year were "reasonable".
He told Sky News: "The market has rates going up to 2.5% over next three years. That seems like a broadly sensible judgment."
Sir Charlie admitted that in the run-up to the crash, economists were "not sufficiently cognisant of the risks building up in the financial system" but insisted the economy is far more resilient than when he arrived at the central bank in 2000.
Interest rates are likely to hit 5% within a decade, according to the outgoing Bank of England deputy governor for monetary policy. Sir Charlie Bean said it would be "reasonable" to expect borrowing costs to return to pre-recession levels in the long term - between five to 10 years.
Homeowners have enjoyed a historically low 0.5% base rate for five years but the level has caused misery for savers. Sir Charlie told Sky News: "It might be reasonable to think that in that long term you would go back to 5% but it's probably quite a long way down the road."
Earlier this week, Bank of England governor Mark Carney urged people to focus on the "big picture" rather than obsessing about when interest rates will start to rise.
It followed accusations that he had been behaving like an "unreliable boyfriend" by hinting at a rise this year, before appearing to back-pedal.
The Bank of England today left interest rates on hold at 0.5%.
The Bank left the scale of its quantitative easing (QE) programme to boost the money supply unchanged at £375 billion.
House prices are likely to continue rising "solidly" over the next few months, according to a leading economist.
Dr Howard Archer, chief UK and European economist for IHS Global Insight, said: "Housing market activity is likely to be supported by substantially improved consumer confidence, markedly rising employment, improving earnings growth and extended low mortgage interest rates."
The rise is also currently being fuelled by the Help to Buy initiatives and a short supply of homes in some areas, he added.
Annual house price rises in England are being driven by a 17% year-on-year increase in London, where the average house price has reached £459,000, according to the Office for National Statistics.
"House prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth," it said in a report.
It also recorded a 6.6% rise in the East and a 6.1% increase in prices in the South East.
House prices rose by 8.0% in the 12 months to March to reach £252,000 on average but are 0.5% lower than they were in February, Office for National Statistics figures show.
David Cameron said he would consider changes to the Government's Help to Buy mortgage scheme if advised to do so by the Bank of England.
When asked on Radio 4's Today show if the Government would think about changing the mortgage guarantee scheme to reduce its upper borrowing limit, the Prime Minister replied: "Of course. We will consider any changes that are proposed by Mark Carney."
The Bank of England's Governor said at the weekend that the bank is looking at new measures to control mortgage lending amid a shortage of home building.
The Help to Buy mortgage scheme lets people buy property worth up to £600,000 with deposits as a low as 5%.
House sellers' asking prices went up 8.9% in the last 12 months, meaning the average property is on sale at a new record high of £272,003.
- In London, asking prices went up 16.3% in the last year
- Compared with 4.9% across the rest of the country
- Ten out of 32 boroughs in London say annual rises of more than 20% - with a 43% increase in Tower Hamlets driven by cash buyers.
Deputy Prime Minister Nick Clegg told ITV News the government may have to scale back its flagship 'Help to Buy' housing policy.
Nick Clegg said a warning from the Governor of the Bank of England - that booming house prices are a threat to economic recovery - must be heeded.
In comments that appear to contradict Chancellor George Osborne's defence of the programme, Mr Clegg said: "If Mark Carney - in view of his concerns about the housing market - thinks we should scale back on some of those schemes, that's exactly what we should do."
Deputy Political Editor Chris Ship reports.