Unemployment levels in cities beyond London and underemployment will be looked into before deciding on raising interest rates from their record low 0.5 percent, Bank of England Governor Mark Carney said in a newspaper interview.
"What we can do is pay attention to the economy as a whole across the United Kingdom. A recovery that is only existent in the South East of England is not ultimately going to be a sustainable recovery for the United Kingdom as a whole," Carney told the Liverpool Echo on Thursday. (link.reuters.com/xyr43v)
Carney reiterated the central bank's new approach to nurturing Britain's economy back to health, effectively that the BoE would not consider raising interest rates until unemployment falls to 7 percent, something it does not expect until late 2016.
Financial markets have bet on the bank raising interest rates sooner than that, given the signs that Britain's economy is finally snapping out of its post-recession sloth.
Three BoE policymakers defended the new guidance plan in speeches this week. They stressed the importance of showing consumers and businesses that interest rates would not rise anytime soon, even as the economic recovery picked up speed.