Get ready for higher interest rates, warns new Bank governor Canadian Mark Carney said businesses should prepare for 'slight or material change' in the level of interest rates Outgoing governor Sir Mervyn King said increases a long way off Higher rate a blow to homeowners and firms used to cheap borrowing By Hugo Duncan Economics Correspondent Canadian Mark Carney said businesses should prepare for possibility of a 'slight or material change' in interest rate levels Britain's record low interest base rate could be on the way out after more than four years at 0.5 per cent, the new governor of the Bank of England warned yesterday. The introduction of a higher rate would be a blow to homeowners and firms used to cheap borrowing. Canadian Mark Carney, who takes over from Sir Mervyn King on Monday, told ITV News a rise was on the cards, adding: "Without doubt they need to manage their business for the possibility of a slight or material change in the level of interest rates." Households that are heavily in debt could struggle with increased mortgage repayments and other loans if the Bank puts rates up, although savers would be delighted. Sir Mervyn, who retires after ten years as governor, told MPs on the Treasury Select Committee: "It is clearly the case that with the prospect at some point down the road of higher interest rates it is not sensible to be in a highly indebted position." But he said rate increases were a long way off, and only after the economy recovered. Deputy governor Charlie Bean suggested rates could actually be cut to minus figures to stimulate growth. "There is nothing special about going into negative territory," he said. A reduction in Bank rate, including to below zero, remains an option. However, Simon Rose, of the campaign group Save Our Savers, said: "Artificially low interest rates have not produced growth but still these idiotic central bankers want them lower, perhaps even into negative territory." The Bank slashed interest rates to a record low of 0.5 per cent in March 2009 and has since pumped £375billion of emergency funds into the economy to stop recession turning into depression. If the Bank of England increases rates it would be blow to homeowners and firms used to cheap borrowing Officials at the Bank and the Treasury believe Britain is finally on the road to recovery more than five years after the financial crisis struck. But the outgoing governor added: "The recovery is in sight but it is too weak to be satisfactory." He added that a premature rate increase would kill off the recovery by hammering households and firms unable to deal with higher borrowing costs. Sir Mervyn also played down the prospect of higher interest rates in other nations, saying "we are nowhere near" a return to normal, and that those expecting imminent rate rises "have rather jumped the gun." He lambasted governments around the world for not using the breathing space provided by central banks to take tough decisions needed to stabilise the global economy. Outgoing governor Sir Mervyn King said rate increases were a long way off and only if the economy recovers The eurozone "remains a tremendous problem" for the global economy, and in particular Britain, he added. His comments came as the ailing British property market was boosted by a 24 per cent rise in mortgage approvals. After five years in the doldrums, 7,000 more home loans were taken out in May, compared with the same month last year when 36,102 were approved, according to the British Bankers Association (BBA). The value of home loans in May was £5.5billion - the highest level for 16 months. The revival was confirmed by a second study that reported a surge in the number of homes being put on the market for more than £500,000. The figure is expected to have risen by 19 per cent in the second three months of 2013 compared with a year ago, while it is predicted to have increased 26 per cent in London and the West Midlands. An image of Jane Austen could replace Charles Darwin on the £10 note An image of Pride And Prejudice author Jane Austen could be used on a new £10 note, it emerged yesterday. Departing Bank of England governor Sir Mervyn King said that the novelist is "quietly waiting in the wings" to replace Charles Darwin. The move follows the row over the choice of Sir Winston Churchill to take over from prison reformer Elizabeth Fry on the fiver, which would have seen a return to an all-male line-up on banknotes. The Bank has not yet made a decision on when the £5 note will be changed or who will be on it. But Sir Mervyn yesterday told the Treasury select committee: "The figure we've been working with for two years is Jane Austen." She would be only the third female historical figure to appear on bank-notes since 1970, following Fry and pioneering nurse Florence Nightingale. The final decision on who will appear will be taken by Sir Mervyn's successor, Mark Carney. A possible supporter for more women may be Mr Carney's wife, Diana, who has campaigned for greater equality and voiced support for the anti-capitalist Occupy movement.