BoE: We will not hike rates until unemployment rate hits 7%

The Bank of England has said it will not raise the base rate of interest before unemployment falls to 7%, and warned investors are still expecting rates to rise sooner than is likely.

In its quarterly inflation report, the Bank unveiled plans to tie interest rates to unemployment, but added its new 'forward guidance' to the market is not  unconditional. The 7% mark represents the point at which the BoE will "reassess" its interest rate policy, Governor Mark Carney (pictured) said this morning. The Bank currently expects that unemployment will not reach that threshold until 2016. The unemployment rate currently stands at 7.8%. Carney said guidance was also dependent on inflation remaining within 0.5 percentage points of the Bank's 2% target on a two-year horizon....