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Bank of England members mostly agree on new plan

Minutes to the latest Bank of England meeting show only one member voted against new policy for forward guidance
Minutes to the latest Bank of England meeting show only one member voted against new policy for forward guidance

Policymakers at the Bank of England were nearly united in their wish to implement plans by new governor Mark Carney to issue "forward guidance" on interest rates.

Mark Carney introduced the concept last week, saying the bank probably will not raise its benchmark rate - now at 0.5% - until the unemployment rate drops to 7%.

Some 750,000 jobs would need to be created to hit that mark, which is not expected until 2016.

Policymakers hope to spur Britain's weak recovery by giving businesses and consumers confidence that rates will likely remain low.

Minutes to the latest meeting show only one member voted against, saying he disagreed on how it would be implemented.

UK unemployment rate steady at 7.8% in June

The UK unemployment rate held steady at 7.8% in June but a sharp fall in jobless benefit claims in July pointed to a strengthening labour market.

The Office for National Statistics said the number of people claiming jobless benefit fell by 29,200 last month - almost twice the drop analysts had forecast. There was also a favourable revision to the previous month which took the drop in June to 29,400, the largest monthly drop on this measure since May 2010.

The claimant count has now fallen for nine consecutive months, taking the rate to its lowest in more than four years.

The number of people without a job on a wider international measure showed a much smaller improvement, leaving the rate unchanged at 7.8%. It is this wider measure that the Bank of England will focus on in its monetary policy deliberations.

There were some signs that pay is picking up but it remained well below inflation. Average weekly earnings growth accelerated to 2.1% in the three months to June compared with a year earlier, the fastest growth since late 2011.