The Bank of England will likely meet its inflation and jobs goals if it starts to raise its benchmark interest rate early next year, Gov. Mark Carney said Tuesday in his clearest statement yet on the probable timing of a first move towards unwinding crisis-era stimulus. In a speech to labor union members in Liverpool, Mr. Carney said the rate at which wages rise over coming months will be key to the exact timing of the first move, and repeated his assurance that a rise in the benchmark rate will be "gradual and limited." Mr. Carney said the U.K.'s economic recovery has "exceeded all expectations" and "has momentum." Against that background he said the time for interest rates to "normalize" is nearing, and that in recent months the decision on whether to raise or leave policy unchanged "has become more balanced." Most investors expect the BOE to raise its benchmark interest rate from a 320-year low of 0.5% in the first quarter of 2015, and Mr. Carney appeared to validate that expectation. "Our latest forecasts show that, if interest rates were to follow the path expected by markets--that is, beginning to increase by the Spring and thereafter rising very gradually--inflation would settle at around 2% by the end of the forecast and a further 1.2 million jobs would have been created," he said. "In other words, we would achieve our mandate." Should it raise its benchmark interest rate early next year, the BOE would likely become the first major central bank to start to remove the unprecedented levels of stimulus provided to the economy since the financial crisis struck in late 2008. The U.S. Federal Reserve is expected to start to raise its key rate later in the year, while the European Central bank Thursday provided additional stimulus in the form of rate cuts and new bond buying programs. With the Japanese economy struggling to recover from an April hike in the sales tax, the Bank of Japan may yet provide more stimulus. Mr. Carney told union members that British workers had played a key role in ensuring the economic recovery had been strong enough to allow the central bank to contemplate a return to more normal monetary policy settings. He said the pace at which wages rise will be key to the central bank's decision, and indicated policy makers will have enough evidence of a pickup in pay deals early in the new year. "We will be closely monitoring pay settlements that are bunched around the turn of the year and taking a steer from the pay of new hires as a potential leading indicator of broader pay pressures," he said. The central bank has long been puzzled by an apparently inexplicable decline in the rate of U.K. productivity growth, which has been weaker than in other developed economies. But Mr. Carney Tuesday presented that as the consequence of a "supply shock" that could be positive for the long-run growth prospects of the U.K. economy. He said that Britons had responded to the financial crisis by cutting the price at which they were prepared to work, and seeking to work more in order to prepare for retirement and reduce their high debt levels. As a consequence, businesses had invested little in new equipment, instead hiring additional workers and reducing productivity growth as a result. Article