The Bank of England has confirmed that it will not raise interest rates from the current rate of 0.5% until the national unemployment rate drops below 7%.

Mark Carney, Bank of England governor, said it could take up to three years and the creation of 750,000 jobs to move the current unemployment rate of 7.8% to below 7%.

Carney said the UK economy is seeing a renewed recovery which appears to be broadening, but it has not yet reached “escape velocity” yet.

He said: “While that is certainly welcome, the legacy of the financial crisis means that the recovery remains weak by historical standards and there is still a significant margin of spare capacity in the economy, this is most clearly evident in the high rate of unemployment."