Bank of England united on freezing rates

Bank of England policymakers recently voted unanimously to maintain record-low interest rate and the amount of cash stimulus for the improving British economy, minutes showed on Wednesday. The central bank's Monetary Policy Committee voted 9-0 to keep its key lending rate at 0.50 percent and maintain its bond-buying quantitative easing (QE) scheme at £375 billion ($607 billion, 441 billion euros), according to minutes of a meeting held in early October. The minutes come ahead of the first official reading of third-quarter British economic growth due on Friday. Despite Britain enjoying a recovery from recent recession, Bank of England decided to sit tight regarding policy in light of the country's unemployment rate remaining far above 7.0 percent. "With unemployment remaining above the 7 percent threshold, the Committee’s forward guidance therefore remained in place and no MPC member thought it appropriate to tighten the stance of monetary policy at the current juncture," read the minutes. October's MPC gathering was the second session since the bank announced a "forward guidance" strategy under new governor, Canadian national Mark Carney. Under the policy change, any rise in record-low interest rates is to be tied to a drop in British unemployment. The key interest rate will remain at the current level of 0.50 percent until Britain's unemployment rate falls to at least 7.0 percent, the central bank has said. The Bank of England's own projections indicate that such a drop from Britain's current unemployment rate of 7.7 percent would not occur for three years, but markets are betting on this happening sooner. The interest rates could in any case rise earlier should British annual inflation remain high above its target rate of 2.0 percent, the Bank of England has itself warned. The BoE's main task is to use monetary policy as a tool to keep annual inflation close to a government-set level of 2.0 percent, in order to preserve the value of money.