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%.
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There are still hurdles to overcome before growth gets back to a sustainable level, including boosting business investment and trade”
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.”