Bernanke sends a rate rise alert

US Federal Reserve chairman Ben Bernanke today said the central bank is ready to raise interest rates when the outlook for the economy "has improved significantly".

Economists said it was a stark reminder that record low interest rates cannot last for ever and must be reversed to curb inflation.

Bernanke said: "Accommodative policies will likely be warranted for an extended period. At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road."

Christopher Rupkey, of Bank of Tokyo Mitsubishi in New York, said: "He could not have been more pointed when reminding his worldwide audience that the low-rates promise is conditional."