Bank of England keeps policy unchanged after October meeting

Reuters

LONDON, Oct 10 (Reuters) - The Bank of England kept itsmonetary policy unchanged on Thursday as expected, sticking toits commitment to keep interest rates steady while unemploymentremains high.

The central bank made no change to its 375 billion pounds($597 billion) of asset purchases or to its main interest rate -which has stood at a record-low 0.5 percent since March 2009 -following the Oct. 8-9 meeting of its Monetary Policy Committee.

Britain's economy has shown signs of further recovery thismonth, diminishing the prospect of more asset purchases, whichhad been backed by a minority of policymakers until new GovernorMark Carney unveiled his forward guidance strategy in August.

Carney said the central bank would not raise interest ratesbefore the unemployment rate - currently 7.7 percent - falls to7 percent, unless inflation threatens to get out of control.

The BoE forecasts it will take until late 2016 beforeunemployment falls this far, despite strengthening economicgrowth, but most private-sector economists think unemploymentwill fall much faster, and financial markets price in a raterise as soon as early 2015.

Earlier this week the International Monetary Fund revised upBritain's economic growth prospects by the biggest amount of anyadvanced economy, forecasting growth of 1.4 percent this yearand 1.9 percent for 2014.

The MPC made no statement alongside its monetary policyannouncement, as usual, and details of its discussions will notbe published until the release of minutes on Oct. 23.

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