New BoE policymaker Forbes warns against waiting too long to hike rates

(Adds more quotes, background)

By Andy Bruce and Ana Nicolaci da Costa (NasdaqGS: ATX - news)

LONDON, June 18 (Reuters) - Interest rates may eventually have to rise more abruptly if policymakers wait too long for information about risks building in Britain's economy, incoming Bank of England official Kristin Forbes said on Wednesday.

Making her British public debut before joining the Monetary Policy Committee next month, the American academic told lawmakers she agreed with BoE Governor Carney that the timing of interest rate rises will hinge on economic data.

But she also warned against waiting for signs that cost pressures or imbalances are reaching threatening levels before changing monetary policy.

"Delaying any adjustments in order to gather more information could increase the risk that any subsequent adjustments in monetary policy would need to occur more abruptly," said Forbes, a former economics adviser to U.S. President George W. Bush.

She also said changing monetary policy at an earlier date would provide flexibility to make adjustments more gradually, although there was also a risk that a premature change could slow the recovery.

Earlier on Wednesday, minutes from the MPC (KOSDAQ: 050540.KQ - news) 's June meeting showed rate setters were surprised that markets had not priced in a higher chance of an interest rate rise this year.

Forbes told lawmakers she still had "much to learn" about Britain's economy and would not fully move to Britain until a year into her three-year term, because she had been unable to find appropriate private schooling for her children.

Although the role on the MPC is technically a three-day-a-week position, most policymakers treat it as full-time. But Forbes said she would return to Boston most weekends and continue to teach for the Massachusetts Institute of Technology.

Last week, Carney surprised markets when he said a rise in interest rates could come sooner than they had been expecting.

"I think that my take on it is that the BoE (Shenzhen: 000725.SZ - news) has been trying to provide as much guidance as it can while constantly reminding everyone it still depends on the data," Forbes said.

She added that it was unclear whether the current sources of economic growth and gains in employment were sustainable, noting that the decline in Britain's savings rate cannot continue for long without presenting major risks.

By the end of August, three of the BoE's nine seats on the MPC will have changed hands in the space of three months.

Andy Haldane attended his first rate-setting earlier this month as BoE chief economist. Former International Monetary Fund official Minouche Shafik joins in August. (Additional reporting by David Milliken and Limei Hoang, Editing by Larry King)