Investing.com - The rate of unemployment in the U.K. fell to 7.1% in November, nearing the point at which the Bank of England has said it will consider raising interest rates, but the central bank reiterated that it sees no immediate need to act.
The Office for National Statistics said the U.K. unemployment rate fell to 7.1% in the three months to November, to stand just above the 7% level the BoE has said is its threshold for considering raising interest rates from their current record low of 0.5%.
It was the largest drop in unemployment since 1997 the ONS said. Analysts had expected the jobless rate to fall to 7.3% from 7.4% in the three months to October.
The ONS said the number of people claiming jobless benefits fell by 24,000 in December, compared to expectations for a decline of 35,000.
But the minutes of the BoE’s January meeting, also published on Wednesday, stressed that the bank is in no rush to act.
"It was now likely that the unemployment rate would reach the 7% threshold materially earlier than previously expected," the minutes said, but officials "saw no immediate need to raise Bank Rate," the bank’s benchmark interest rate, "even if the 7% unemployment threshold were to be reached in the near future."
Policymakers also agreed that when the time did come to tighten monetary policy it would be appropriate to do so only gradually.
In August the BoE said it expected the U.K. jobless rate to remain above 7% until at least 2016. A faster-than-expected economic recovery has meant the unemployment rate has fallen far more quickly than the BoE anticipated.
On Tuesday, the International Monetary Fund upgraded Britain’s growth forecast to 2.4% in 2014 from 1.9% in October, more than any other country, while its forecast for growth in 2015 was raised to 2.2%.