Guardian economics correspondent Richard Partington tweets:

After recovering from the losses earlier in the week on Wednesday, the FTSE 100 has headed south again to end the day 1.5% lower at 7,170 points.

A fall was to be expected to some degree, given that the earlier jump in sterling usually means a hit for London's blue-chip index. That because a stronger pound means lower profits for the many companies on the FTSE that make the bulk of their profits abroad.

However, it seems that London is following Wall Street lower, as the S&P 500 is down 1.2% and the Dow Jones Industrial Average has shed 1.3%

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Bosses from 19 Japanese companies, including the likes of Nissan and Toyota, met with prime minister Theresa May this afternoon in Downing Street.

After the meeting Japan's ambassador to the UK said that no firm would be able to keep operating in Britain if it is not profitable due to Brexit-related trade barriers.

"If there is no profitability of continuing operations in the UK - not Japanese only - then no private company can continue operations. So it is as simple as that," said Koji Tsuruoka (pictured) when asked about the threat posed by a failure to secure a post-Brexit free trade deal with Europe.

"This is all high stakes that all of us, I think, need to keep in mind."

That earlier rally, which sent sterling up 1.3% against the dollar, has lost much of its steam and is now only 0.8% higher at just under $1.40.

Wall Street Journal Mike Bird makes a fair point about today's sterling rally:

Image source, Reuters

Perhaps no great surprise that YouTube has found no evidence of Russian sources using ads on its platform in a bid to interfere in the Brexit referendum.

Juniper Downs, YouTube's public policy chief, told a hearing of the Commons Digital, Culture, Media and Sport Committee that the company would be ready to help further investigations into possible Russian attempts to influence votes in the UK.

The committee was taking evidence from internet companies YouTube, Facebook, Google and Twitter in a session of its inquiry into fake news being held in Washington DC.

The cross-party panel of MPs was also using the trip across the Atlantic to meet senior senators who have been investigating allegations of Russian interference and collusion in US presidential election won by Donald Trump.

Duncan Weldon, a former Newsnight economics correspondent who is now head of research at the Resolution Group, boils today's announcement from the Bank down to the very bare bones:

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The market gyrations continue today, with the FTSE 100 now down about 1% at 7,211 points.

It's a similar story across the pond, with the the Dow Jones Industrial Average off about 0.74%, the S&P 500 has shed 0.5% and the Nasdaq Composite is down 0.4%.

"While volatility in the markets has eased over the last couple of days, it has remained at very high levels - probably a sign of the ongoing nervousness among investors which may leave markets vulnerable to further declines," said Craig Erlam at Oanda.

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Sterling has continued to climb higher in the wake of the Bank's soundings on interest rates, with the pound now back above $1.40 against the dollar, and close to €1.1440 against the euro.

Kamal Ahmed
Economics editor

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Today the Bank signalled that the old conventions of increasing interest rates when inflation is above target would return.

The cost of mortgages is likely to rise and savers at last will see returns improve.

The economy is stronger, the Bank has made clear today - but not everything in the garden is rosy.

It points out that the UK economic engine still "remains restrained by Brexit-related uncertainty", which is "the most significant influence on the economic outlook".

We are driving along with the hand brake half-on.

Growth is modest by historic standards and the UK has gone from the fastest growing economy among the G7 largest global economies to the slowest.

Read more from Kamal here.

BBC2's Daily Politics presenter Andrew Neil tweets:

Samuel Tombs, chief UK economist at Pantheon Macroeconomics reckons so.

He said: "The MPC has brought a May rate hike into play by stating that it thinks interest rates '…would need to be tightened somewhat earlier and by a somewhat greater extent' over the next three years than anticipated in November."

Ben Brettell, senior economist, Hargreaves Lansdown, agrees.

He said: "It now looks like the next rise could happen as soon as May – the next time the Bank’s economic forecasts are due to be updated."

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Many savers have not yet seen the returns on their accounts rise since the Bank increased interest rates to 0.5% from 0.25% last November. What does the Bank have to say?

Mr Carney says recent movements in savings and loan rate are similar to those seen in the past. He points out that the gap between what banks and building societies charge on their mortgages and the rate they pay to savers has actually narrowed in recent years.

Ben Broadbent, deputy governor, says: "It's not the case that banks are fleecing their customers relative to the past. Deposit rates have gone up a little bit," while he says mortgage rates haven't for many people who have fixed deals.

Mr Carney says higher investment and the end of austerity in several advanced economies will help to boost growth, which might see interest rates rising gradually around the world. With that, the news conference ends.

How has the recent financial turbulence affected policymaking?

Mr Carney says he will not deliver a "running commentary on financial markets"

He recognises that recent volatility in markets had been "extremely low", so much so that he believes that "at some point there would be an adjustment".

"It's not an entirely surprising development," he says.

However, reforms after the financial crisis mean big sell-offs don't matter as much as they used to. He says it's "incredibly important to recognise we feel strongly that the core system is entirely different to the past," so big stock market falls don't result in a big hit to households and businesses.

Why is the Bank so gloomy on the outlook for growth and living standards given that the most recent figures show productivity has picked up?

Mr Carney says productivity growth has disappointed for a while, which has resulted in downgrades to its medium-term outlook.

Ben Broadbent, the Bank's deputy governor for monetary policy, says there are reasons to believe that the recent strength may not be sustained. While policymakers "remain hopeful" that it will pick up, he says the Bank would not rip up its forecasts after one data release.

Mr Carney is asked why, given weaker growth than seen in the past, sluggish household spending and the recent financial market turbulence, are interest rate rises even on the cards?

He says that investment has been weak, which has fed into the "modest" growth in productivity - a key ingredient for rising living standards and stronger growth over the medium term.

He says: "That means the economy cannot grow as fast as it used to without generating inflationary pressures... and we have to deal with the consequences of that. The speed limit of the economy has changed."

As a result, the Bank is likely to have to raise interest rates to prevent it from overheating, even if growth does remain subdued relative to historic rates.

He highlights that growth is not debt-fuelled and the economy is expected to be supported by stronger pay growth in the coming years.

He says the interest rate rise in November last year has pushed up mortgage costs for those on variable rates, but adds that 60% of outstanding mortgages are now tied to fixed rates, which also cushions the impact of rate rises for households.

"We have been providing a significant amount of support to this economy during a very difficult period," he says, which has ensured the economy remains robust and the jobs market remains strong.

However, he adds there are limits to the Bank's powers.

"The most important decisions by orders of magnitude for the years to come are not going to be taken in Threadneedle Street," he says, but elsewhere, as part of the Brexit negotiations.

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Kamal Ahmed, the BBC's economics editor, asks the governor to elaborate on the overarching message of the latest Inflation Report.

Is it a warning to British households that they can expect interest rates to rise at a faster pace than before? He also asks Mr Carney's opinion on the government's Brexit impact assessments.

Mr Carney says that in order to return inflation to the 2% target in an economy that could be at risk of overheating, it may be necessary to raise interest rates.

He stresses that any increases will be limited and gradual, but more than it expected in November if growth remains steady. Back then, they said interest rates could rise to around 1% by the end of the decade, up from 0.5% today.

"The message is not that rates will rise rapidly," he stresses again. But instead that they could rise "somewhat sooner and a to somewhat greater extent".

On the impact assessments, the governor stresses that the Bank was not involved in compiling them.

He says that the Bank does take into consideration how households have responded to developments in negotiations and the vote.

For households, they are mainly feeling the pinch from the squeeze on real incomes, while there has been a "notable" impact on investment on businesses, which has picked up, but not to the extent to which you might expect, given the strength of the global economy.