"With the proviso that medium-term inflation expectations remained sufficiently well anchored, the projections for growth and inflation under constant Bank Rate underlined that there could be a case for not raising Bank Rate immediately when the 7pc unemployment threshold was reached"
- MPC minutes
The Monetary Policy Committee members unanimously voted to keep interest rates at record low level of 0.5%, which remains unchanged since March 2009, and signalled they will not immediately raise benchmark rates even after the 7% unemployment target is reached, the MPC minutes from November 6-7 meeting revealed. Last week the nation's central bank said that unemployment could decline faster than forecasted. Reaching the targeted level by the end of 2014 Moreover, the Committee took a decision to leave bond purchasing programme unchanged at 375 billion pounds. Despite the fact that U.K. economy is in sustained recovery and no significant inflation risks exist, the MPC officials were uncertain about the "durability of the recovery" and stressed that substantial "headwinds" persist. Currently the U.K.'s unemployment stands at 7.6%, while inflation fell to 2.2% in October. The BoE expects a 0.9% growth in the final quarter of 2013. Las week Charlie Bean, the BoE's deputy governor, said that policymakers would use the coming year to assess how much "slack" remained in the economy.
Meanwhile, U.K. mortgage lending rose in October to levels last seen before the crisis in 2008 , as the property market has been boosted by ultra-low rates as well as lavish credit-easing programmes launched by both the central banks and the Treasury.
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