Mark Carney said the present high level of net migration was 'a key risk' to the economy

Immigration is posing a threat to Britain’s recovery by holding down wages, the Bank of England has warned.

Mark Carney, the governor, described the current high level of net migration as “a key risk” to the economy if it continues to bear down on pay.

Central to the Bank’s outlook is the assumption that “domestic demand is sustained by the recovery in real incomes” and that “wage growth picks up”.

However, the Bank cut its forecast for earnings growth this year from 3.5 per cent to just 2.5 per cent, blaming the downgrade partly on near-record levels of immigration.

Mr Carney’s decision to wade into the immigration debate comes just days after a general election marked by the rise of UKIP and as the new