By Anthony Reuben Business reporter, BBC News, Davos Criticism of the Bank of England's forward guidance policy has been unfair, Chancellor George Osborne has said.
"I completely reject that forward guidance is a failure," he told a panel on monetary policy in Davos.
He added that the Bank's clear communication had helped create "a very strong set of data in the UK".
Figures on Wednesday showed the unemployment rate had fallen much faster than the Bank expected.
Last year, Bank of England governor Mark Carney said that the Bank would not consider raising interest rates until the jobless rate had fallen to 7%.
Chancellor Osborne stressed that the unemployment rate was still only at 7.1%, and quoted Mr Carney's comment from a BBC Newsnight interview on Thursday that there was no need for an immediate rise in interest rates.
The Bank of England had not been expecting the jobless rate to hit 7% for another two years.
The Financial Times suggested on Friday that Mr Carney's BBC interview had shown that "his big idea for monetary policy has bitten the dust".
But Mr Osborne said the debate over forward guidance was only taking place because there was a recovery underway, highlighting the differences with the "gloomy debate" about the economy at Davos last year.
He added that the growth in the economy was evidence that monetary policy had worked and that he had expanded the range of tools available to the Bank of England.
On the sidelines after the discussion, a delegate describing himself as a market participant leapt to the defence of Mr Osborne and Mr Carney, saying it was perfectly clear that the 7% had been a threshold and not a trigger for the raising of interest rates.
There was some disagreement during the session with former US Treasury Secretary Larry Summers, who is critical of the UK's austerity measures.
But Mr Summers said it would probably be a good idea for them to focus on the areas in which they agreed.
Mr Osborne agreed with the suggestion that there was an infrastructure deficit and also a deficit in spending on research in life sciences.
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