"The unemployment rate has fallen a little more than expected in August," Bank of England governor Mark Carney said, "and that is to be welcomed."
He said there was a "2 in 5 chance" of the unemployment rate reaching the 7% threshold by the end of next year.
At that point, the Bank of England Monetary Police Committee will consider changes to quantitative easing and interest rates.
David Cameron says his economic plan is "on track" despite a Bank of England admission that interest rates could rise sooner than expected.
Today's growth forecast may seem to be good news for the Coalition, but the increasing cost of living could cause problems at the polls.
Most borrowers are not economists. Deciding whether they can afford to borrow has just become more difficult.