(MENAFN– ecpulse) BOE policymakers continued to split for a second month over raising interest rates, while U.K. unemployment fell to the lowest in six years.
The minutes for the BOE policy meeting showed that MPC members Martin Weale and Ian McCafferty voted for a 25 basis points increase.
However, the majority insisted that the interest rates have to remain for some time amid the risks stemming from the euro area and low inflation.
Evidence of a deterioration in the euro area economy was “the most significant development,” BOE minutes said.
The subpar growth and low inflation the euro area are threatening confidence in Europe and thereby global financial markets.
On the other hand, the minority claimed that “wage growth might pick up quite sharply as the slack was absorbed.” “The erosion of spare capacity was likely to remain rapid while policy remained expansionary.”
The key focus will turn tomorrow to Scotland as voters go to vote on independence from the 307-year-old UK union.
A “Yes” vote could open the door for myriad problems on the financial sector, while some economists warned Scotland would release into recession.
U.K. ILO unemployment for the three months through July retreated to 6.2 percent from 6.4 percent, better than median forecasts.
In August, jobless claims dropped 37,200 compared to analysts’ forecasts of 30,000 fall.
Wage growth climbed an annual 0.7 percent in the quarter ended July while including bonuses, it soared 0.6 percent
As of 08:55 GMT, the pound traded slightly higher versus the pound at 1.6290 after hitting a high of 1.6330.
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