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Interest rates held until unemployment falls

Mark Carney, governor of the Bank of England has said that the Bank will not raise interest rates until the unemployment rate has fallen to 7%.

Unemployment currently stands at 7.8%.

Carney also said that until that threshold was reached the Bank of England would not cut back on its £375bn asset purchase programme.

Mr Carney said this strategy was to help both secure the recovery and ensure that risks to inflation / financial stability were contained.

"A renewed recovery is now underway in the United Kingdom and it appears to be broadening," he said.

"While that is certainly welcome, the legacy of the financial crisis means that the recovery remains weak by historical standards and there is still a significant margin of spare capacity in the economy, this is most clearly evident in the high rate of unemployment."

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