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Britain's economy returning to normal

LONDON (AP) -- The Bank of England dampened expectations that interest rates in the U.K. will be raised imminently as Governor Mark Carney said the country's economy has only begun heading back to normal.

While unveiling the bank's quarterly economic projections Wednesday, Carney was cautious, noting that despite positive news _ including a drop in the unemployment rate to its lowest level in five years _ progress must be made in closing the level of “slack” in the economy.

Even when that's achieved, Carney said borrowing rates will most likely rise only gradually. The bank's benchmark interest rate stands at a record low level of 0.5 percent.

Carney says the “exact timing will inevitably be the subject of considerable speculation and interest.”

The pound dropped in response, trading 0.4 percent lower at $1.6769.

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