Policymaker hits out at Bank critics

David Miles also said he was more confident about Britain’s recovery prospects than at any time since he joined the Bank in 2009, but that people should not expect a quick return to more normal monetary policy given how weak the economy has been.

Last month, the BoE announced a new strategy of linking its record low interest rates to a fall in unemployment in order to guide Britain back to growth.

The announcement coincided with signs that the long-awaited recovery was picking up speed.

That led to a rise in interest rates and sterling and prompted criticism from some economists and media that the guidance was a failure because the BoE might have to raise rates before late 2016, as suggested by the plan.

Miles said the tightening of financial conditions since August, while not helpful, was “benign” because it reflected Britain’s better economic prospects, and he rejected the criticism as a “rather Alice in Wonderland, upside down logic”.

“It implies that somehow the MPC find unwelcome signs of a recovery in the economy.

“I can assure you that we do not!” he said.

He added the market’s apparent view that unemployment might fall to the BoE’s threshold level of 7 per cent in the next 18 months was “rather sooner than I think is likely”.