Mark Carney promised in August that the Bank would not raise the cost of borrowing unless and until the unemployment rate fell to 7% from its then level of 7.7%.

The governor has now  revealed that the Bank’s number crunchers believe there is a 40% chance unemployment will reach the 7% threshold by the end of next year.

He added there is a 60% chance it will happen by the end of 2015.

He said: “Through that guidance we are giving businesses and households the confidence that interest rates won’t go up until jobs, incomes and spending are recovering at a sustainable pace.

“In line with the unexpected strength of demand, the unemployment rate has fallen a little more rapidly than expected in August. That is to be welcomed: 100,000 more people are in work as a result.”

Carney said the unemployment threshold is a staging post for assessing policy, not a trigger for an automatic increase in Bank Rate.

“When the threshold is reached, the MPC will set policy to balance the outlook for inflation against the need to provide continued support to the recovery in output and employment,” he added.

With the recovery taking hold, our task now is to secure it, he said. But he added that the bank will remain vigilant regarding any risk to stability from the housing sector, in terms of price rises or household leverage.

“We have a direct line of sight on the housing market across all of our responsibilities, and any potential risks will in the first instance be addressed by the Financial Policy Committee,” he said.

Today the UK unemployment rate fell 0.2% in the three months to September to 7.6%, its lowest level in more than three years, official figures revealed.