Carney sees green shoots of recovery on visit to region

Mark Carney told the Yorkshire Post: “It’s gathering some pace, but it’s still early days.”

He added that the sustainability of the wider UK recovery will “turn on gradually getting incomes up, more people into work, but also getting wages up over time and that’s going to come from sustained demand and a balanced recovery”.

Mr Carney defended his controversial new forward guidance policy, which was designed to give households and businesses advance notice of interest rate hikes. The central bank will consider increasing the cost of borrowing once average UK unemployment falls to seven per cent.

Mr Carney said: “[We are] well aware that the level of unemployment in the region is nearer to nine per cent than it is to the national average of 7.7 per cent.

“But this is a policy for the UK as a whole and the point is that businesses and households understand that we are not going to look to raise interest rates until we see the economy really growing.

“Using that seven per cent unemployment threshold is the point at which we begin to think about tightening. That should be consistent with growth broadening across the UK, including, very importantly, to Yorkshire.”

Business Secretary Vince Cable is among those who have criticised the Bank’s “capital Taliban” for imposing tough restrictions on banks, which they fear will restrict lending. But Mr Carney said: “We are working for the British public on this one. You can’t lend unless you’re adequately capitalised and that’s been proven time and time again.”

Asked about the Co-operative Bank, which needs to fill a £1.5bn capital hole, Mr Carney said: “They presented a capital plan. They need to execute on it.”

Chancellor George Osborne hailed Mr Carney as “outstanding central banker of his generation”.

Comment: Page 12; Yorkshire in prime position: Page 16.