BoE plays down earlier rate hike expectations

Bank Of England Building

Bank of England (BoE) Governor Mark Carney played down expectations of an early rate hike, despite signs of a pickup in the U.K.'s economic recovery.

Speaking at a press conference following the publication of the BoE's Quarterly Inflation Report, Carney said a hike in rates will depend on the degree of slack in the U.K. economy, and the prospects for its absorption.

In its Inflation Report, the Bank of England kept its U.K. growth and inflation forecasts broadly unchanged, although lowered its expectations for unemployment.

"The economy has edged closer to the point at which the bank rate will need - gradually - to rise," Carney said, but stressed that discussions of timings should be kept "in perspective."

Read More UK jobless rate hits lowest in more than 5 years

He reiterated that when the main interest rate does begin to rise, it will be gradual.

The Inflation Report came just an hour after data revealed that U.K. unemployment fell to 6.8 percent - its lowest level in over five years.

Read More Great Recession over as UK nears pre-crisis peak

Wage growth including bonuses in the country also rose by more than inflation for the first time although this was lower than expected, and excluding bonuses, wage growth slowed in the three months to March.

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