A report by the BBC has stated that the Bank of England governor Mark Carney says the UK recovery has “taken hold” and unemployment will fall sooner than it had forecast.
The comments came in the Bank’s latest quarterly inflation report, which raised the forecast for UK economic growth this year and next.
Mr Carney has said the Bank will not consider raising interest rates until the jobless rate falls to 7% or below.
On Wednesday, the UK unemployment rate was reported at 7.6%, down from 7.8%.
Growth for this year is forecast to be 1.6%, up from 1.4% previously thought, and for next year, annual growth is expected to be 2.8%, rather than the 2.5% it predicted in August.
The report said: “In the United Kingdom, recovery has finally taken hold. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand.”
It has given a range of forecasts of when it thinks unemployment could fall to 7%. The most optimistic of these is next year, two years ahead of the time frame it gave in August.
The odds for this are low, though.
The Bank said: “The MPC [Monetary Policy Committee] attaches only a two-in-five chance to the… unemployment rate having reached the 7% threshold by the end of 2014.
“The corresponding figures for the end of 2015 and 2016 are around three in five and two in three respectively.”
The Bank said on Wednesday that it was not planning to raise interest rates any time soon from their current record low of 0.5%.
Even when – and if – the jobless rate reaches 7% the Bank will not automatically move to change the cost of borrowing.
The chief policy director of the business lobby group, the CBI, Katja Hall, said: “The Bank’s forecast confirms businesses’ view that the UK economic recovery is on track.
“But there are still hurdles to overcome before growth gets back to a sustainable level, including boosting business investment and trade. ”
Here at Grafton Haymes we are seeing many of our clients showing a more confident and assertive approach to recruitment, as well as more positive expansion plans for 2014. Please let us know if you are seeing an upturn in business growth and how you are planning for 2014.