Interest rates to be held until unemployment drops to 7%

The new Bank of England governor, Mark Carney, has said the Bank will not raise interest rates until UK unemployment has fallen to 7%. It currently stands at 7.8%.

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

Mr Carney said: "The MPC intends, at a minimum, to maintain the current exceptionally accommodative stance of monetary policy until economic slack has been substantially reduced."

However he said price and financial stability would take precedence over the unemployment threshold.