Mark Carney inflation report: live 15.30 So how much has changed at the Bank of England, then? These wordles - comparing Carney's words today and Lord Mervyn King's at the last inflation report in May - show that, if not in deed, then there have been some shifts in the words our bank governors use. For a start, Carney was more wordsy - he used 1,464 words in his opening remarks compared to King's 1,215. His statement was also more balanced - six words closely contended for the top slot, whereas King used the word "inflation" at least twice as many times as the most common word, "monetary." For more linguistic analysis, take a look at James Titcomb's piece decoding Carney's language. Wordle of Carney's opening comments at the August Inflation Report. Wordle of King's opening comments at the May Inflation Report. 15.20 The BBC's Stephanie Flanders has concluded that Mark Carney would like us to think he has and has not loosened monetary policy at the same time. She argues that all the Bank did today was share their thinking with everyone else - and that their thinking is, well, complicated. In other words, the Bank has been looking to balance growth and inflation for some time now. 14.56 Over in the US, the Dow Jones Industrial Average has fallen 0.4pc as investors, nervous that a tapering of quantitative easing could begin as soon as next month, digest various comments from Federal Reserve officials. The FTSE 100 is currently off 0.9pc. 14.45 A leopard does not change its spots Marc Ostwald, strategist at Monument Securities, sees little changed at the Bank of England. He disagrees with those who are concerned that the Bank's forward guidance is under threat from runaway inflation. Have we all forgotten so quickly what the MPC has done for much of the past 5 years, that is, put up ridiculous forecasts that always suggest that inflation will go back to target on a two-yr time horizon, even though it was obvious it would not, and dismiss any rise in inflation expectations as transitory and certainly being indicative of expectations becoming unanchored. So, please do tell me why a leopard would change its spots? 14.24 Our graphics team has put together a nifty summar of the five key charts in today's inflation report: those on growth, inflation, unemployment, probability of unemployment falling below 7pc, and the interest rate forecast. Check it out here. 14.10 Long-term unemployment has created a near-permanent loss of 420,000 jobs Economics editor Philip Aldrick has been taking a closer look at the Bank of England's 56-page inflation report. He found a chart tucked away on page 29 that shows the recession has caused the near-permanent loss of around 420,000 jobs. This means that even when the economy is operating at full throttle, the best unemployment rate we can hope for is 6.5pc. Before the financial crisis it was 5.2pc. On today's figures, that means 2.1m people would be unemployed even if the economy was fully recovered. Had the "equilibrium" rate of unemployment not been affected by the recession, just 1.68m would be jobless. The Bank said the difference was due to the high rate of long-term unemployment. The proportion of people classified as long-term unemployed has risen from 20pc to 35pc since the crisis. The long term unemployed are a third as likely to find jobs as the short-term unemployed, the Bank said. Economists call this "hysteresis," caused by the loss of skills. Over time, the natural rate of unemployment will fall back to 5.2pc, the Bank stressed, as people retrain and move to where the work is. 14.00 Body language expert Patrick O'Donnell has analysed the subtle signals that betray when Mark Carney is experiencing anxiety or conflict...and concluded that the topics that concern the new governor most are on expanding stimulus, exceptional monetary policy and maintaining stability. He notes the following: At 1 min 16 sec in the forward guidance section of his broadcast, he raises the forefinger of his right hand when he mentions "exceptional monetary policy." At around 2 min, when he mentions the relatively low productivity record in the UK, he demonstrably hesitates and stumbles somewhat over the words. Again, at 2 min 26 sec, he hesitates as he talks about exceptional monetary stance. Later when he talks about guaranteeing financial stability, another speech hesitation occurs. What could this mean? Here's Professor O'Donnell: One interpretation of the asymmetry in his arousal signs is that he is more worried about either the likelihood or the consequences of too much stimulus than he is about the dangers of lapsing back into recession or stagnation. Interestingly when he talks about the potential falls in future unemployment the speech hesitation occurs again. Perhaps he wishes to pursue an expansionist policy (although not through further QE apparently), wants to keep interest rates low but worries that the markets will frustrate him. 13.48 Chancellor George Osborne has written a letter to Mark Carney welcoming the Bank's decision on linking the interest rate to unemployment, as well as the "important approach of allowing the threshold to be "knocked out" if thre are material risks to price stability or financial stability." Sent at 13:44 on Wednesday me: splendid- thanks Sent at 13:47 on Wednesday 13.40 What about mortgages? Brokers say fixed rate mortgages could fall even further if rates stay low until 2016, but they are not right for every borrower. Richard Dyson has more details. With very little prospect of Bank Rate cuts, mortgage borrowers are steering clear of tracker mortgage deals, where rates are linked to the Bank's Rate. Instead, the "vast majority" are opting for fixed rates, according to analyst David Hollingworth of broker London & Country. But how long should that fix be? The very lowest rates apply to two-year fixed rates where a record-breaking deal at 1.49pc is currently available from HSBC (provided borrowers have a minimum 40pc deposit or equity). For those with smaller deposits the best two-year rates fall around the 2pc mark. Two-year fixes are of limited appeal to borrowers with big mortgages who worry that their deal will come to an end just as rates start to climb. "The trend is likely to see more borrowers edging toward medium to longer-term fixed rates in a bid to protect against rate increases that may still be a couple of years away," says Hollingworth. Shorter term rates remain lower but could come to a close just as rates are on the move. 13.26 How to explain the market reaction? Nick Lewis at Capital Spreads attributes a sharp about-turn in the markets during Carney's remarks to a realisation that forward guidance does not necessarily mean loose monetary policy will remain in place until 2016. due to the caveats around low interest rates- namely runaway inflation or a faster-than-expected fall in unemployment. 12.58 Still, the business world has greeted the move, saying it will boost enterprise. The British Chambers of Commerce said sustained low interest rates will "give businesses a much-needed confidence boost when looking to invest, as they know that any plans will not suddenly be derailed by a hike in interest rates." Meanwhile Philip Monk, chief executive of Aldermore Bank, a new lender which serves homeowners and small businesses, said Mr Carney's measure brings an end to uncertainty which has seen "perfectly reputable SMEs with excellent business models have been refused or simply starved of credit by many banks." 12.43 PwC's Andrew Sentance notes that, given the Bank's caveats around its forward guidance, there is little guarantee of low interest rates. Unemployment may fall more quickly than the Bank expects if the recovery gathers momentum. Persistent above-target inflation could also cause the MPC to reassess its position. So though the objective of this "forward guidance" is to increase confidence that interest rates will remain low, there are still many uncertainties which could result in interest rates rising faster than today's statement suggests. 12.20 Suffering from information overload? Here's a lunchtime round-up of the key points Carney covered this morning. BoE introduces forward guidance... The most ground-shaking announcement was of course that the Bank of England is going to break with tradition and explicitly tie its monetary policy to the performance of the economy- namely unemployment. The Bank of England will keep its key interest rate at the record low 0.5pc for at least as long as unemployment remains above 7pc, on three conditions: that low interest rates do not post a threat to financial stability, increase medium-term inflation expectations or affect the BoE's forecast that inflation will fall below 2.5pc in 18 to 24 months' time. Unemployment is predicted to fall below this threshold in late 2016. BoE upwardly revises GDP growth forecast... The BoE now expects the UK economy to grow by 1.4pc this year and by 2.4pc in 2014 - compared with previous estimates of 1.2pc and 1.7pc respectively. 3. ...but says the economy has not reached 'escape velocity' yet. Carney poured cold water on the notion that the British economy has returned to rude health. He repeatedly pointed out that, while recent signs of momentum in the economy are welcome, that this is the weakest recovery on record - and records began more than a century ago. The BoE's inflation target remains unchanged at 2pc and is predicted to hit this level in 18 - 24 months. Finally to the apparent subject of today's press conference - the inflation forecast. The Bank said it expects inflation to return to its 2pc target in 18 to 24 months. 12.03 After an initial tumble, the pound has continued to strenghten against the US dollar. It's now trading at a six-week high of $1.5493. The dip happened the moment the Bank of England released its inflation report and forward guidance announcement, but was followed by a swift recovery and rally. Source: Reuters 12.02 The FTSE 100 appeared to fall sharply around the time that Mr Carney said the UK economy has not reached escape velocity, so that may have unsettled some dealers. The index is currently down around 56 points, or 0.8pc, at 6,547. 11.58 The Guardian's Philip Inman reckons the 7pc unemployment threshold was not Carney's preference. 11.54 A dangerous policy? The Institute of Economic Affairs is more direct, describing Carney's forward guidance as "the most dangerous development in UK monetary policy since the late 1980s." Mark Littlewood, director general, said: Monetary policy should be designed to ensure that we have stable prices. The level of unemployment is mainly determined by a range of factors such a labour market regulation, the benefits system, tax rates and so on. To try to use monetary policy to reduce unemployment when inflation is already above target is playing with fire and could lead us down the road that we followed in the 1970s. This move also calls into question the independence of the Monetary Policy Committee and the Bank of England's ability to fulfil its statutory duties. 11.48 Bond specialist Neil Williams describes the Bank's choice of unemployment as a policy yardstick as a "puzzle" and says the "experiment will be interesting." He also warns that forward guidance could backfire by deferring bond purchases, which would lead the UK into the "realms of 'a Japan." 11.39 It was only a matter of time. Paddy Power is open for bets on when the interest rates will rise. Here are the odds: 7/4 2016 or later 11.37 Time's up on the press conference - that's all we'll be hearing from Carney today. But don't forget, he's now gathering the City's economists to make sure the forward guidance policy is understood correctly. 11.35 Channel Four's Faisal Islam has asked whether this is a loosening in monetary policy. This is about making stimulus more effective. What's the path that we think is best for the economy while supporting to extent recovery. Second is reassurance. Third is to test how much excess supply there is in economy. 11.31 Watch Mark Carney's announcement about tying interest rates to the unemployment level here: 11.28 The BBC asks why the Bank would tie its hands to this forward guidance at a time when the economy appears to be picking up. Hands are not bound here. The MPC is providing much greater clairity about how we would react to underlying economic conditions. This is exactly the time when something like this is appropriate. We are at the start of a renewed recovery but it's after a very sharp recession and very long period of weak growth. This is the weakest recovery on record. There is significant slack in this economy. In the relief about the recovery, expectation can build up that that immediately means pulling back on monetary stimulus. The MPC is saying we need to make further progress and we're doing it in a way that fully takes account of our responsibility for price stability. 11.23 CNBC's Helia Ebrahimi asks about the threat posed by the eurozone to the British economy. There has been important progess over the course of last year and there remains important work in progress to sustain monetary union and enhance potential of European economy. The upcoming asset quality review by the ECB will be important in further enhancing and reinforcing resilience. We should not get ahead of ourselves in terms of expectations - there remain risks. Senior authorities are aware of these risks, in our forecasts we don't include the most extreme risks that could emanate from the eurozone. While the eurozone economy has stabilised and begun to pick up slighttly, in order to gain exports, British firms will need to build their competitiveness by investing and improving productivity, its not going to be from demand pull. 11.20 Sky's Ed Conway is asking about whether the BoE's asset purchases will continue taking the form of buying up government bonds. This is the policy we have at present which is the adoption of this forward guidance. The existing stock of asset purchases and taking into account Funding for Lending and other things. In the MPC's judgment that's the appropriate stance. It's not about additional measures, its a question we'll ask ourselves at other meetings. It would be inappropriate for me to speculate under future hypotheticals and I would only be one of nine individuals on the MPC. 11.16 Channel 5 asks what the message is to ordinary people. The MPC is going to maintain exceptional monetary stimulus until unemployment reaches 7pc at which point we will reconsider. That means three-quarters of a million more jobs. The second message is we will do this while maintaining price and financial stability. We will do this in a fashion that reflects that commitment. 11.12 The Telegraph's Philip Aldrick asks whether Carney is concerned about an unbalanced recovery. He says the path to sustainable rebalancing is to increase productivity. One of the advantages of our approach is that it allows us to test the degree to which productivity wil recover alongside demand and by helping to spur demand we test that. If we see more demand being met by supply all other things being equal that means it will take longer to achieve the threshold which means more stimulus. 11.11 Forex.com's Kathleen Brooks has noticed that the Bank of England's guidance document is littered with escape clauses. 11.10 The losses in the FTSE 100 have now accelerated, with London's index of leading shares down about 1pc. The blue-chip index briefly rose when the Bank of England made its announcement. 11.09 Carney does not give away whether the decision was unamimous, in response to a question from the FT's Claire Jones. He says everyone will find out when the minutes come out next Wednesday. 11.03 The Telegraph's Jeremy Warner asks whether Carney shares concerns of the Bank of International Settlements around holding interest rates low for an extended period of time. The point is that there are several lines of defence before one even gets to monetary policy, the only change of emphasis is to make the emphasis on using all of those lines of defence first before the very blunt tool of monetary policy is considered to be used. Watch Carney respond to Jeremy here: 11.00 The Independent has asked whether the economy has reached escape velocity. We're not at escape velocity, the economy is returning to levels of growth that could begin to be described as approaching historical averages after prolonged period of weak performance. 10.57 Sterling took a dive against the US when the announcements came out, but recovered quickly. It fell as low as $1.5205, but is now trading around $1.533. The ten-year gilt yield spiked to 2.525pc and are still sitting around this level. 10.53 Reuters asks about whether Help to Buy will fuel a housing bubble. It's something we watch closely.We have to put recent developments in the housing market in context. We still see for example mortgage applications are well below historic averages. We see high loan to value loans. Valuations are still a bit off. 10.51 Chancellor George Osborne is pleased with the announcement. He has declared the BoE guidance plan is consistent with the Government's "absolute commitment" to the 2pc inflation target. 10.49 The 7pc unemployment level is not a target, just a reflection of the state of the economy, says Carney. 10.47 The Observor asks Carney whether the government's spending cuts have impeded a return to lower unemployment. Carney says he is concerned with price stability primarily, and his job is to chart the best path back to the 2pc inflation target. This is about us fulfilling our primary objective, and given the circumstances doing it in a balanced way. 10.44 Question time: The Guardian kicks off by asking Carney - why unemployment? There is a considerable margin of slack in the UK economy, the question is how big. The uncertainty about slack in the UK economy relates mostly to firms, not to the labour market. Productivity about 15pc below pre-crisis trends. Its not the judgment of the MPC that the scale of the gap is that large. There is a margin of productivity that can be recovered as the economy recovers. In designing guidance one would look at measures of productivity, the problem is that's extremely difficult, what we can measure is the unemployment rate and so the judgment of the MPC when weighing up guidance that would be appropriate was to use the unemployment rate which is readily understood, widely available and not subject to revisions. 10.43 A tall order... 10.41 He's summed up the current state of the British economy thus: It's an understandable relief that the UK economy has begun growing again, but there should be little satisfaction. 10.41 Stock market dealers at first appeared to like what the Bank of England has to say: The FTSE 100, which was down earlier in the morning, briefly moved into positive territory on news that interest rates will be tied to unemployment and rose 0.2pc, although it has now slipped back into the red again and has fallen 0.3pc. 10.40 He's emphasising that the 7pc unemployment rate won't be a trigger for raising interest rates, but rather a trigger at which the MPC will re-assess its monetary policy. 10.37 Here are Carney's opening remarks: A renewed recovery is now underway and it appears to be broadening, but the recovery remains weak by historical standards. It's more improtant than ever for the MPC to be clear and transparent in order to avoid tightening Even under the assumption that the current exceptionally stimulative stance is maintained, the MPC expects GDP growth of 2.4pc in 2 years time, a rate little below historical average. This is the slowest recovery output on record. Unemployment still high, 1m more are unemployed than in the financial crisis. We have exceptionally weak productivity, a significant margin of slack in economy, scope for rebound very uncertain Inflation is at 2.9pc and is likely to remain about that level in the near term. Underlying domestic inflationary pressures remain subdued. Even on the assumption that rate remains at current level, inflation will fall back to 2pc a little after the two year horizon This is an exceptionally challenging environment in which to set monetary policy. 10.34 And here's the upwardly revised growth forecast - the Bank now predicts the economy will grow 1.4pc in 2013 and 2.4pc in 2014, up from earlier estimates of 1.2pc and 1.7pc respectively. 10.32 This is effectively a commitment to keep rates low until 2016. The Bank of England's Inflation report says it expects unemployment to remain above 7pc until at least the third quarter of 2016. 10.31 The unemployment rate at which rates will increase is set at 7pc - it currently stands at 7.8pc. The Bank of England is tying future interest rates to a drop in unemployment. 10.25 Kathleen Brooks, analyst at Forex, has provided a nifty explanation of the point of forward guidance. The aim of forward guidance is to convince the man on the street or the small-to-medium size business owner that interest rates will remain low for the long-term, which should give consumers the confidence to buy that house/ car etc., and for businesses to invest in expansion and create jobs. This type of interest rate guidance is the latest unconventional monetary policy tool and it has been growing in popularity. Carney introduced a time contingent form of forward guidance in 2009 when he was at the Bank of Canada and pledged to keep interest rates low for two years. The Federal Reserve in the US also employs forward guidance and has said that interest rates won't move higher until the unemployment rate drops to 6.5pc. 10.04 Meanwhile Kit Juckes of Societe Generale is sceptical that forward guidance will have much effect, as rate expectations are already low. 10.00 Clear Currency's Peter O'Flanagan says that, in another first for the Bank of England, economists will be briefed following the inflation report "to ensure correct interpretation of their policy message being conveyed correctly." There has been plenty of speculation as to what the forward guidance policy will entail, with rates possibly being linked to the unemployment rate similar to US policy. We expect the post press conference meeting to go into fine detail on this with rate hikes linked to various thresholds or specific economic outcomes or both but for now it does remain a great unknown and we are sure to see GBP volatility around the release. 09.49 Speculation is rife over how any "forward guidance" policy might play out. Might the Bank of England follow the Fed and peg an interest rate rise to a maximum unemploymenet threshold? It could also link monetary policy to a minimum requirement for GDP growth. Or, it could go the way of the European Central Bank, which has issued a commitment to keep rates low for a lengthy period of time, but has not specified what this means. Of course he could revisit his tactics from his Bank of Canada days and give a specific time frame for low interest rates, without linking it to any economic indicators. Mario Draghi, ECB President, introduced his version of forward guidance in July, committing to keep interest rates low for an "extended period." 09.36 Sky's Ed Conway wonders whether the advent of forward guidance could also be the death-knell for the Bank of England's infamous fan charts. The inflation fan charts (also known as the rivers of blood, given their colour) have been a mainstay of these events for years, essentially signalling not just the future expected path of inflation but also, by extension, the Bank's likely actions to bring it down/up. Given forward guidance may rule out this kremlinological technique of guessing the Bank's future actions, is there much point in the fan charts any more? Certainly they will be less integral than they used to be. A fanchart from the Bank of England's May 2013 inflation report. Source: Bank of England 09.29 The Twittersphere is wondering whether Carney's appearance today could be hyped up just a little more... 09.11 Jonathan Sudaria, a trader at Capital Spreads, says central bank developments - and not just those at the Bank of England - will dominate stock market senitment today: Later today we see the [US Federal Reserve's] Plosser speak, a known hawk who has continually called for a September taper so no surprises about what he will say. However, it is the words from dove Pianalto later on that could really stir sentiment today. If another dove adopts a hawkish tone, with markets currently seeing tapering outweighing positive economic strength, we could see some sharp moves lower. In the UK, markets and consumers are eagerly awaiting details of Carney's unconventional forward guidance on interest rates. Expectations are that low interest rates will be in place for either a set time or until a certain economic benchmark is reached. The issue that could scupper Carney's efforts is if the time period is to short, say less than 2 years or that the economic benchmark is too attainable, such as a marginally lower unemployment rate. Assuming Carney hits the right spot, we could still see some weakness in equities as the overhang from the Fed's tapering dwarfs even domestic bullishness. 09.02 The other closely watched element of the Bank of England's inflation report, apart from news on the adoption of a forward guidance policy, will be the Bank's economic forecasts. Since the new governor took up his post, it's been nothing but upbeat news from the UK economy. Just yesterday, official figures on industrial production showed a strong uptick in manufacturing output in Britain. But Jeremy Warner is not convinced that the recent string of good news indicates anything more than a "gently reviving economy based largely on credit fuelled consumption." Like all statistics, it's how you tell 'em. Yes, production output grew by 0.6 per cent between Q1 and Q2 and manufacturing grew 0.7 per cent over the same period. The one month tally looks even more impressive - production up 1.2 per cent in June compared to a year earlier and manufacturing 2 per cent. Unfortunately, this gives a highly misleading impression of what's actually happening. There were fewer working days in June last year, and looking at the figures on a three month basis, both production and manufacturing is well down on the same period last year. Manufacturing is slightly higher than it was at the trough of the recession, but industrial production as a whole is actually lower. And there's the rub, for though there is undoubtedly some kind of a recovery going on, it's not the recovery - based on business investment, exports, savings, and the "march of the makers" - the Government was either hoping for or predicting. In fact it is the same old unsustainable form of growth that took place under Gordon Brown. Industrial production rose in June, but it is still a far cry from pre-crisis levels. 08.45 Boosted by well-received first-half results, insurer Old Mutual is the biggest riser in the FTSE 100 in early trade, having jumped 4.7pc in a falling market. The group said it was boosting its dividend by 20pc to 2.1p and reported a 14pc rise in adjusted operating profit to £801m. But tour operator TUI Travel has shed 5.2pc following the release of its latest numbers, despite posting an 18pc rise in underlying operating profit for the third quarter. 08.44 In China, the national regulator has fined six foreign-owned baby milk formula makers a total of $110m following an investigation into price-fixing and anti-competitive practices. Official news agency Xinhua described the fine as a record for China. The news could indicate the magnitude of penalties in store for foreign pharmaceutical fisms, which are also subject to a probe by the watchdog. China's National Development and Reform Commission said in a statement the fines were for restricting competition, setting curbs on minimum prices for distributors and using a variety of methods to disrupt market order. Demand for more expensive foreign baby milk brands, seen as safer than local products, is high in China. 08.29 Our City Briefing email is full of the morning's corporate news. TUI Travel, the tour giant that owns Thomson and First Choice, says demand for its "unique holidays" has continued to grow. TUI says it has outperformed the market and narrowed its pre-tax losses in the nine months to July at £369m, with sales in its Nordic business improving. Randgold, the gold miner, says that it has been able to sustain profitably despite falls in the price of the precious metal. However, with average selling prices falling from $1,606 an ounce a year ago to $1,363 in the three months to July, profit during the period is down from $117m to $46m. Eurasian Natural Resources Corporation, the Kazakh miner at the centre of a corruption investigation, has issued a business-like production update, revealing that extraction is up across the business, while Ukrainian iron ore miner Ferrexpo has been hit by higher costs, with half-year profit before tax down 12pc at £150m. Anglo-South African insurance group Old Mutual has posted an 11pc rise in half-year profits to £805m, down to progress in emerging markets and US asset management. Grainger, the UK's biggest listed residential property owner, says it has reached its target of getting its debt below £1bn ahead of schedule. Chief executive Andrew Cunningham says this "places Grainger in a strong position to capitalise upon the opportunities arising from a strengthening market." Construction group Kier has announced that its consortium has won the contract for a £70m project to build and maintain nine ageing fire stations in the south east and east of London. Jaguar Land Rover's owner Tata Motors will report full-year results later today. Gold miner Rangold has taken a hit to its profits after the average selling price fell to $1,363 per ounce in the three months to July, down from $1,606 a year ago. 08.16 The boss of the New Zealand dairy firm embroiled in a contamination scandal has declared that all tainted products have been removed from the market. On Friday, Fonterra discovered that a 38 tonne batch of its whey protein concentrate product had been contaminated and shipped around the world. The intervening days have involved huge product recalls by companies that use Fonterra's products - including Coca-Cola, Danone and Chinese drink maker Wahaha. 08.10 As Claire Jones in the Financial Times points out, today is Carney's first major test of leadership at the Bank. The force of the guidance he gives will reflect the extent to which he has convinced the eight other members of the Monetary Policy Committee of the plan. She notes that there are some vocal opponents to forward guidance in the MPC - including deputy governor Charlie Bean and chief economist Spencer Dale. 08.05 Its a weak start for the FTSE 100, which has fallen 42 points at the open to 6,562, a decline of 0.6pc. Precious metals Randgold Resouces, which has disappointed with its second-quarter numbers, is the heaviest faller in a soft market and is off 4.2pc. 07.45 While a commitment to keeping rates ultra-low until the economy has regained its strength will be new to the Bank of England, it is no novelty to Mark Carney. The new governor implemented this kind of policy, known in central banking parlance as "forward guidance," in his former role at the helm of the Bank of Canada. In April 2009 he committed to holding keeping the main interest rate low for at least a year. That year marked the beginning of the Canadian economic recovery 07.30 Economics Editor Philip Aldrick expects Mr Carney to deliver a double dose of good news - rising growth and falling inflation. But the one dark spot on the report, says Philip, will be sluggish wage growth, which still have some way to catch up, growing at just 1.1pc. Many economists are expecting the Bank to upwardly revise its GDP growth forecast for this year, which currently stands at 1.2pc. If this happens, it will be the second consecutive quarter in which forecasts are revised upwards - drawing a firm line under years of downgrades in the wake of the 2008 financial crisis. 07.25 In Japan, the Nikkei took a bit of a tumble overnight. The country's benchmark index fell 4pc to 13,824.94 today, its lowest close in a month, while the broader Topix shed 3.22pc to 1,155.26. 07.20 In this morning's Telegraph, our columnist Allister Heath criticised a long-term commitment to low interest rates, saying that doing so "inevitably distorts economies and misallocates resources." [Low rates] allow unsustainable projects to survive, pushes bond, equity and property prices too high, depresses the value of sterling without, in a modern economy, boosting exports, messes up the pensions market, and incentivises consumption over saving - and all of that even before inflation begins to rear its ugly head. Slashing interest rates to just 0.5pc and embracing quantitative easing was the right medicine a few years ago - but we are now suffering from an overdose, with too many people addicted to the Bank's monetary methadone. It took too long for the Bank to loosen policy at the start of the recession, and it now looks like it will take it too long to tighten as the recovery gathers speed. That, sadly, is typically what one gets when trying to centrally plan the price and quantity of money. Read his whole piece here. 07.15 Later this morning Mark Carney will break his silence to deliver his first inflation report for the Bank of England and he's expected to do so with a bang. The new governor is set to reveal the Bank's long-awaited "unconventional policy" - a commitment to keep rates at their record low of 0.5pc until the economy returns to rude health - as he presents the quarterly update on the UK economic outlook. The purpose of this policy is to prevent banks from raising their interest rates in anticipation of a hike by the Bank of England, a move which could stifle economic recovery.