Carney concedes that markets expect unemployment to drop faster than Bank of England projections

Bank of England govenor Mark Carney has conceded that markets are pricing in a rate hike before the Bank of England's projections show unemployment falling to the central bank's seven per cent threshold.

Carney said that until unemployment falls to seven per cent that rate hikes will not be considered.

However, forward guidance documentation already includes three caveats (or "knockouts") that allow the Monetary Policy Committee to hike rates before unemployment reaches that threshold if necessary.

The governor cited household expectations of inflation dropping - but that's survey data, and hasn't served as a very effective predictor of high inflation in the past.