UK growth forecast revised sharply upwards

The Governor of the Bank of England has told ITV News the economic recovery remains too fragile to raise rates yet.

Mark Carney's comments come as the Bank today abandoned its flagship forward guidance policy linking interest rates to unemployment after just six months - but insisted they must remain low for longer to support the economy:

The Bank of England has raised its 2014 growth forecast for the UK economy from 2.8 per cent to 3.4 per cent.

The Bank expects fourth-quarter 2013 growth to be revised up from 0.7% to 0.9% and said first-quarter growth will remain "robust" at around 0.8%.

The Bank of England today said there was still "scope" in the economy to keep interest rates at record lows under new guidance on the cost of borrowing.