The Bank of England should steer clear of an early move to raise interest rates, and is as likely to need to cut rates as to raise them in future, its chief economist said today. 

Andy Haldane said recent strong wage data had not changed his view from earlier in the year about the dangers of tightening policy too soon.

A drag on growth from sterling strength could outweigh the gains from higher wages, he cautioned. 

"A policy of early lift-off could be self-defeating," Haldane said in a lecture which he intends to deliver to students at the Open University tomorrow. 

"Looking ahead, I have no bias on either the size or the direction of future interest rate moves," he added. 

Haldane's comments stand in contrast to those of other Bank of England policymakers such as Martin Weale, who views stronger wage growth as a sign that interest rates may need to rise sooner rather than later. 

He said the upward surprise in wages needed to be seen in the context of a number of past downward surprises. 

"Wages are not about to embark on a rocket-propelled ascent," he said. 

Moreover, he said that other things being equal, the 3% strengthening in sterling since May would reduce UK inflation and growth rates by 0.2 percentage points at the two-year horizon the BoE uses to set policy. 

"In other words, the exchange rate news may be more important quantitatively for the two-year-ahead inflation outlook than the recent news from wages," he said.