Carney sets guidance on interest rates New Bank of England governor Mark Carney gave borrowers a boost this morning with guidance that interest rates will remain at their record low until unemployment falls below 7 per cent. Unveiling a new strategy of forward guidance, the bank said it expects rates will remain at 0.5 per cent until at least the end of 2016 unless inflation rises sharply. It will also refrain from reducing the £375 billion stock of gilts bought through previous quantitative easing programmes and stand by to print more money if the recovery stalls. Given the expected growth in the labour force, the UK economy would have to generate almost a million extra jobs for unemployment to fall below 7 per cent. Even then, the figure will not automatically trigger a rate rise, but will instead be the cue for the bank's monetary policy committee to reconsider its stance. Carney said that "a renewed recovery is now under way" as the Bank predicted 0.6 per cent growth in the third quarter, but said there was significant slack in the economy in terms of productivity which meant inflation is unlikely to rise above 3 per cent this year.