HIGHLIGHTS-Bank of England policymakers speak after inflation report

LONDON, Nov 24 (Reuters) - Bank of England Governor Mark Carney and some of his fellow policymakers are answering questions from members of Britain's parliament about the central bank's latest projections for the economy.

Below are some of their comments.

MARK CARNEY, BANK OF ENGLAND GOVERNOR:

APPROPRIATE TIME FOR RATES TO INCREASE

"The question in my mind is when is the appropriate time for interest rates to increase and that is strongly consistent with the strength of the domestic economy."

NO NEED FOR NEGATIVE INTEREST RATES

"I don't think the most likely scenario is that the equilibrium interest rate in the United Kingdom is negative and therefore we need effectively to have negative interest rates."

REAL UK EQUILIBRIUM RATE

"I do think that the real equilibrium interest rate in the United Kingdom has turned positive and as some of the headwinds ... reduce, it will in most likelihood continue to rise."

GLOBAL EQUILIBRIUM INTEREST RATES

"I do think that global equilibrium rates are likely to be lower than historic averages for a considerable period of time."

LOW INTEREST RATE ENVIRONMENT

"One of the concerns in a low prolonged interest rate environment, in which we are clearly are, and are likely to remain for some time, even with limited and gradual rate increases it still will be a relatively low interest rate environment."

IMPACT OF FALLS IN ENERGY PRICES

"From the perspective of the current conjuncture, and the impact on British households, the net impact of these falls in energy prices is to reinforce the growth in incomes and as a consequence we have the highest growth in real incomes since the crisis."

FX APPRECIATION MORE COMPLICATED THAN ENERGY PRICES

"We by and large look through those energy prices, we have a more complicated judgement to make around the implications of pass-through from higher exchange rate and foreign disinflation and we do that by setting the horizon over which, we wish to return inflation to target we have adjusted that slightly given the persistence of pass-through work done by professor Forbes and others at the bank recognising the degree of pass-through and also the persistence, we've adjusted the horizon to around two years, instead of within two years."

PRESSURE ON CENTRAL BANK INDEPENDENCE

"In terms of pressure on central bank independence around the world, I would say that pressure has increased in recent years. It (Other OTC: ITGL - news) 's entirely appropriate that central banks are subject to intense scrutiny given the scale and the importance of their responsibility, but I would suggest that given the burden that has been placed on monetary policy in particular since the crisis there have been some tendencies towards challenging that independence."

ANDY HALDANE, CHIEF ECONOMIST:

RISKS SKEWED TO DOWNSIDE

"I see the balance of risks around UK GDP growth and inflation as skewed materially to the downside, more so than embodied in the November 2015 Inflation Report. There are of course also risks to the upside, but I consider these to be both more modest in scale and somewhat easier to cope with should they occur."

GERTJAN VLIEGHE, EXTERNAL MEMBER, MONETARY POLICY COMMITTEE:

POCKETS OF OVERHEATING

"If you have concerns about a very isolated sector then that's a prime candidate for a macro-prudential measure but if you see little pockets of overheating and there are more and more across the economy then increasingly that's telling you that this is no longer a macro-prudential issue, it's a monetary policy issue. We're very well aware of not falling into the trap of using that wrong instrument and so far it's only ever been about isolated pockets."

IDEA OF "HELICOPTER MONEY" HAS PROBLEMS

"I also think there are really big problems with helicopter money or cancelling gilts or whatever you want to call it, because it is essentially us saying that we are abandoning our inflation targets and that is not something for us to decide because we have been tasked with meeting the inflation target."

ABOLITION OF CASH "INTERESTING IDEA"

"For me reductions in interest rates and further asset purchases are the first line of defence, the next tools we go to ... The abolition of cash is an interesting idea when thinking about how electronic payments might naturally evolve over the next few decades, it is not a policy measure for the Bank of England to implement it. You cannot hold cash so that we can reduce interest rates further."

KIRSTIN FORBES, EXTERNAL MEMBER, MONETARY POLICY COMMITTEE:

SHOULD START TO SEE NEUTRAL INTEREST RATE PICK UP

"We should start to see that neutral interest rate begin to very gradually pick up naturally."

NEUTRAL INTEREST RATE

"We don't fully understand where the neutral interest rate is today."

NEXT INTEREST RATE MOVE WILL BE UP

"Given the state of the UK economy, a solid recovery, I still believe certainly the next move in interest rates will be up, we will not require loosening."

EVIDENCE THAT QE LESS EFFECTIVE IS WEAK

"There is some very weak and mixed evidence that QE maybe became less effective but the evidence in the academic studies I've seen suggests that is because QE was most effective initially because of the contraction in markets and markets weren't functioning well." (Reporting by William Schomberg, Sarah Young, Lisa Barrington, Li-mei Hoang and Estelle Shirbon)