Bank of England (BoE) governor Mark Carney has hinted that interest rates could rise before spring 2015, but added that the exact timing of the rise would depend on economic data.
In a speech to the Trades Union Congress today, the Canadian governor revealed that unemployment figures have fallen below the 7% threshold at which the Bank would consider raising rates. Unemployment now stands at 6.5%.
He added: "Our latest forecasts show that, if interest rates were to follow the path expected by markets - that is, beginning to increase by the spring and thereafter rising very gradually - inflation would settle at around 2% by the end of the forecast and a further 1.2 million jobs would have been created.
"In other words, we would achieve our mandate."
Although hinting at a spring rate rise, Carney indicated that the timing of any such rise will still depend on how quickly the economy appears to be moving towards its recovery goal.
When rates do go up, they will be "gradual and limited" compared to historical rises.
Last month, the BoE voted to leave the Bank rate at 0.5%, following the first split vote since 2011.
Some commentators have argued that rates should go up sooner rather than later, as the results of such an increase are the "only way to find out where we are" in terms of recovery.
This article was written for our sister website Money Observer