Confused by Carney's interest rate intentions? So's he

At the launch of the report the Governor of the Bank of England said that rates would not rise above their current historic low, of half a per cent, before next year because of a "remarkably weak" rise in real wages.

U-turn on interest rates

However, in an Interview with the Sunday Times today, to mark the first anniversary of the forward guidance policy on interest rates, he said that the base rate may have to go up before households enjoy a rise in living standards.

Mr Carney went on to say that he would not wait for real wages to turn positive before lifting the bank rate from its record low of 0.5pc.

Britain is "much more than halfway" to economic recovery, he said in the interview, speaking of "expansion" and "momentum" displayed by the economy with growth of 3.5 per cent forecast for this year, the highest of any advanced economy.

He said: "Wherever the finish line was in the depths of the crisis, we are much more than halfway towards the finish line now.

"The expansion is proceeding, momentum is more assured; the very fact we have had consistent quarters of growth in line with, or slightly better than, our forecasts shows that."

Just a few days ago, the Canadian governor, who has been described in the media as an "unreliable boyfriend" over his forward guidance policy, accused his critics of being "muddled" as he signalled that the Bank of England will finally hike interest rates when wages start to grow robustly.

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