In one of the most radical policies ever unveiled by a Governor, Canadian Mark Carney said rates would not rise from their current "emergency" low level of 0.5 per cent record until the UK's unemployment rate falls to 7 per cent.
Critics warned that the Governor's clear preference for spending over saving threatened to return Britain to the days of "boom and bust".
The Institute of Economic Affairs (IEA) said the policy, which stunned the City in scale and ambition, was "the most dangerous development in UK monetary policy since the late 1980s."
Steve Davies, the IEA's education director, said: "This is really bad for savers. There is now almost no incentive to save, it's all about borrowing more and spending money in the hope it will boost the economy."
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