Chris Ratcliffe | Bloomberg | Getty Images
The Bank of England's (BoE) monetary policy committee (MPC) expressed 'uncertainties' over the durability of the U.K.'s economy recovery, minutes of its last meeting revealed on Wednesday.
The committee also said there 'could be a case' for not raising the main interest rate when the country's unemployment rate hits 7 percent. The bank has previously given guidance that it would not consider raising the main interest rate (Bank Rate) from its current 0.5 percent until the jobless rate falls to this level.
'There were uncertainties over the durability of the recovery and the extent to which supply growth would keep pace with demand. There were also risks surrounding wage and price-setting,' the minutes said.
( Read more: BoE upgrades growth forecasts as recovery takes hold)
'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 7 percent unemployment threshold was reached.'
The minutes also revealed that all nine members of the MPC had voted to keep the main interest rate and bond-buying purchase target unchanged.
They come amid an increasingly rosy picture of accelerating growth, falling inflation and a four-year low in unemployment in the U.K.
Last week the U.K.'s central bank updated its growth, inflation and unemployment forecasts, raising market expectations that it could raise interest rates sooner than expected -- but not just yet.
( Read more: UK economy should beware 'weapons of mass distraction')
In its latest quarterly Inflation Report, the bank also said the U.K. could see 7 percent unemployment as early as the last quarter of 2014, if interest rates stay low -- two years earlier than it had expected in August.
However, it added that the unemployment rate was more likely to hit 7 percent at the end of 2015 or end of 2016, giving such predictions a 57 percent and 68 percent probability respectively based on market interest rates.
Post a Comment