The Bank of England Minutes released on Wednesday, showed that the MPC voted unanimously to keep interest rates at the record low rate of 0.50% and asset purchases unchanged. The BoE base rate has now been at 0.50% since March 2009.
In the minutes it said that despite the sharp fall in unemployment, the committee believed that the economy is able to “absorb spare capacity further before raising rates”. The change in focus from the 7% unemployment threshold to reducing the output gap has come under criticism from some commentators.
Minutes of the MPC Meeting held on 5 & 6 February reveal unanimous vote on #BankRate and Asset Purchases— Bank of England (@bankofengland) February 19, 2014
The UK ILO unemployment rate has become a keenly watched released since Mark Carney set the 7% unemployment threshold under his policy of Forward Guidance. The release from the Office for National Statistics showed that the unemployment rate actually increased to 7.2% from last months 7.1%. The calculation is a rolling calculation for the prevailing 3 months, which is meant to offer a more accurate view.