In a speech he said that he expected rates to rise over the next three years, reaching "about half as high as historical averages", or about 2%.
But he added that shocks to the economy could change the timing and the size of any rate rise.
Interest rates have been at 0.5% for six years as the UK economy recovers from the financial crisis.
The Monetary Policy Committee will "have to feel its way as it goes," Mr Carney said in a speech at Lincoln Cathedral.
He added: "Short term interest rates have averaged around 4.5% since around the Bank's inception three centuries ago.
"It would not seem unreasonable to me to expect that once normalisation begins, interest rate increases would proceed slowly and rise to a level in the medium term that is perhaps about half as high as historic averages.
"In my view, the decision as to when to start such a process of adjustment will likely come into sharper relief around the turn of this year," he added.
His comments come a day after unemployment rose for the first time in two years.
"That suggests the Bank's interpretation of those statistics is that unemployment falls are now being held back by skills shortages," said the BBC's economics editor Robert Peston.
"And those skills shortages are also responsible for rising wage inflation."
On Tuesday, outgoing MPC member David Miles, regarded as someone who is cautious about the impact of rise, surprised markets by saying it was "likely to be right" to hike rates soon.
On Wednesday, Janet Yellen, the chair of the US's Federal Reserve indicated that interest rates are likely to rise in the US this year. That could be a few months earlier than in the UK if indeed the Bank of England were to move in the new year.
If rates were to rise early in the new year, from the current all-time record low of 0.5%, that would be three or four months after the expected equivalent move by the US Federal Reserve.
Now for those of you with big debts looking for reassurance that you are not going to be financially crippled by the increase, he has said two other things of note about the so-called Bank Rate.
First typical interest rate changes, increments, will be typically much smaller than the half of a percentage point that they used to be before the Crash of 2008 - so probably one quarter of a percentage point, or even possibly an eighth.
Also he has signalled that the new normal rate of interest over the medium term after a succession of rises over two or three years will be perhaps half the 4.5% over rate of the past 300 years. So nearer 2%.
Read Robert's blog in full here

The town of Tonbridge is celebrating the end of World War II in Europe with four days of events next month.
Pam Mills, of the Royal British Legion, is trying to locate as many people as possible from photos of an original street party held in the town on 8 May.
They show children "in fancy dress with smiles on their faces", she said.
"You look at it and you instantly smile and you think, 'that's great, let's do it again'."
The black-and-white photos show residents from the Ives Road, Audley Avenue, Clare Avenue and Pembroke Road areas.
Ms Mills has been using social media and local contacts to get in touch with people connected to the original street party, which will be recreated with an afternoon tea party on 7 May at The Humphrey Bean pub in Tonbridge.
One of the residents at the VE Day party was Billy Gowin, 82, who was 11-years-old.
He said he remembered the day well because his older brother Ted, who was in the Royal Engineers regiment and had been missing, returned home from a German prisoner of war camp just hours before the start of the party.
"My brother was guest of honour at the party... he judged the tug-of-war and lit the bonfire in the evening," he recalled, adding that it was a "very exciting day" as his mother knew that her other sons would also be coming home.
BBC South East are collecting viewers' memories, photos and films of VE Day. Please  email:  southeasttoday@bbc.co.uk or call: 0345 300 3747.
Bank of England governor Mark Carney has indicated that UK interest rates could rise "at the turn of this year".
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Organisers of a Kent street party to mark the 70th anniversary of Victory in Europe Day are arranging a reunion with people who attended a party in 1945.