UK’s central bank adjusts strategy

LONDON — The Bank of England is set to unveil a new policy framework after unemployment in Europe’s third-largest economy has fallen far faster than anticipated.

Its governor, Mark Carney, is expected to use the opportunity of the bank’s quarterly projections on Wednesday to update the guidance on the future path of monetary policy.

The overall message, though, is expected to remain the same: Interest rates won’t rise any time soon.


Carney introduced ‘‘forward guidance’’ when he took the top job last summer, saying the bank wouldn’t raise its key interest rate from the current record low of 0.5 percent before unemployment dropped to 7 percent.

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At the time, that threshold wasn’t expected to be breached until next year so homebuyers and businesses would have the confidence to borrow and spend.

However, unemployment has dropped far faster than the bank anticipated and now stands at 7.1 percent as the British economy has shown renewed signs of life.

Associated Press