The Institute of Directors (IoD) has called on the Bank of England’s Monetary Policy Committee to start “normalising” interest rates.

The non-party political organisation stressed the importance of increasing interest rates before “the next crisis strikes”.

The intervention comes as the Bank voted unanimously to hold interest rates at 0.5 per cent for another month, while the rate of inflation, as measured by the Consumer Prices Index, languishes at 0 per cent.

Last Thursday, Bank of England governor Mark Carney suggested he would revisit an interest rate hike “around the turn of this year”.

IoD chief economist James Sproule said: “Extraordinary low interest rates were justified when our economy was in the doldrums. Now that is no longer the case, the Bank of England needs to reassess its policy.

“With the UK leading the G7 in terms of growth, and unemployment low and wages rising at their fastest rate since before the crash, our economy is well-placed to start bringing interest rates back to a more normal level.”

He urged governor Mark Carney to expedite the return of interest rates to a “more sustainable level” so the government has all monetary policy instruments available “when the next crisis strikes”.

Mr Sproule added: “The longer interest rates languish at a historic low, the harder it will be for Mark Carney to raise them ‘slowly and gradually’.

“The earlier the process of normalising rates starts, the smoother the course will be, and the longer the economy will have to adjust and prepare.”

He warned: ” If rates do not begin to return to a more sustainable level soon, the Bank of England will be defenceless when the next crisis strikes, and unable to support the economy by shifts in monetary policy.”