By David Milliken
LONDON (Reuters) - The Bank of England probably has "ample time" before it needs to consider raising interest rates again after its first hike in more than a decade in November, BoE policymaker Silvana Tenreyro said on Monday.
Tenreyro said she felt comfortable at last month's rate-setting meeting to keep on monitoring the impact of the 25 basis-point increase the BoE announced on Nov. 2.
"In December, with unit labor cost growth still subdued and inflation likely to be around its peak, my view was that there was ample time for us to continue to monitor the transmission of the November policy change before voting for another change in interest rates," Tenreyro said in a speech.
The Argentinean-born economics professor, who joined the BoE last year, was among the seven members of the central bank's nine-strong Monetary Policy Committee who voted for the November rate hike. The other two MPC members voted for no change.
In her speech on Monday, Tenreyro said she expected that a couple more increases in Bank Rate would be needed over the next three years. Her comments echoed those of BoE Governor Mark Carney and other top officials at the central bank.
However, Tenreyro said it was possible that productivity growth, a key driver of the overall economy which can also help keep a lid on inflation, could be stronger than the weak improvement that the BoE has predicted.
Most of the fall in productivity growth was due to just two sectors - finance and manufacturing - and they both could see a turnaround soon, while weak investment by companies could recover as the world economy picked up, she said.
"Whether a more or less positive scenario for productivity materializes, as always, the question from an MPC perspective will be how quickly demand responds," Tenreyro said in a lecture that she gave at Queen Mary University of London.
"A key part of my job will be to gauge the size of any emergent gaps between demand and output potential."
Uncertainty about Britain's prospects after it leaves the European Union next year could delay a pick-up, Tenreyro said.
"Understandably, firms will postpone some of the investments and structural changes needed to increase productivity," she added.
Even if British productivity did improve, it was unlikely to return to the annual growth rate of around 2 percent of before the financial crisis.
Most economists polled by Reuters at the start of December predicted that the BoE's next rise in rates would come in late 2018, though some saw a chance of a rise as early as May.