Deloitte Monday Briefing: Thinking About Higher UK Interest Rates

The timing of Mark Carney's arrival at the Bank of England has proved most fortunate. Since he took the reins at the Bank in July growth has accelerated, inflation has dropped like a stone and the economy has created over a quarter of a million new jobs. The UK is now being talked of as the fastest growing economy in Europe.

The Bank, like everyone else, has been caught out by the pace of the recovery. In August, the Bank expected the unemployment rate to stay above 7.0% until the second half of 2016. Since then unemployment has dropped sharply, to just 7.1% in the three months to November. It seems almost certain to fall below 7.0% in the coming months, two-and-a-half years ahead of the Bank's August forecast.