No changes from Bank of England on rates or QEThursday 09 January 2014 18.57
The Bank of England has left monetary policy unchanged today, sticking to its plan to keep interest rates at a record low until the country's surprisingly fast economic recovery broadens out.
Britain has moved from a laggard to a leader in terms of growth among the world's biggest economies last year.
Its economy is expanding by more than 3% in annualised terms although there are concerns the recovery could prove unsustainable, especially as wage growth remains weak.
The Bank of England said in August it will not think about raising rates until unemployment falls to 7%.
Since then unemployment has come down much faster than the bank expected, raising questions about how long it can hold off on raising rates.
But inflation has also fallen to within a whisker of its 2% target, reducing the pressure on the Bank of England.
At its two-day meeting which ended today, the Bank of England's Monetary Policy Committee kept interest rates at 0.5%, as expected by economists.
It also left its bond-buying programme unchanged at £375 billion sterling. The MPC issued no statement after its announcement.
The pace of Britain's recovery has helped the pound to strengthen by 5% against the euro and 10% against the dollar since the middle of last year.
Governor Mark Carney has sought to dampen speculation about an early rate rise, stressing how Britain's economy remains 2% smaller than before the financial crisis, unlike many other industrialised nations which are now bigger than in 2008.
Carney and other policymakers have said repeatedly that the 7% threshold is not an automatic trigger for a rate hike.
But with unemployment falling to 7.4% at its most recent reading and expected to drop further in coming months, some economists say the Bank of England will have to tweak its guidance on when it will start to consider raising interest rates.
In a Reuters poll published last week, 13 of 41 economists said the Bank of England would need to lower its 7% jobless rate threshold. A month earlier, only six of 53 expected the bank to make such a move.
Carney has stressed that the BoE has a range of tools it can use to tackle any problems in Britain's fast-recovering housing market, such as curbs on mortgage lending, without resorting to the "blunt instrument" of raising interest rates.
Data published earlier today showed the trade deficit, another weak point of Britain's recovery, barely narrowed in November although exports to its main trading partners in the euro zone picked up.
The ECB also kept euro zone interest rates steady at their record lows of 0.25% today.