The Bank of England has held the Bank Base Rate at 0.5% and the asset purchase programme at £375bn for a further month.
The rate has been at 0.5% since March 2009. Under the central bank’s forward guidance, the Monetary Policy Committee will not consider raising interest rates until unemployment has reached 7%, among other factors.
In today’s Autumn statement, the Chancellor forecast this threshold will be reached in 2015.
However, MPC member Martin Weale suggested last month the central bank could issue further forward guidance once this threshold was reached.
“It is perfectly possible that, as time moves on, the right thing to do will be to keep the Bank Rate at 0.5% even when unemployment has dropped below our 7% threshold,” he said.
