UPDATE 1-Bank of England's Weale: rates could stay low for some time-paper

Fri Jan 24, 2014 3:10am EST

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LONDON Jan 24 (Reuters) - Bank of England policymaker Martin Weale said interest rates could remain at their historic low for some time, despite a steeper-than-expected fall in unemployment, a newspaper reported on Friday.

Last August, Weale was the only top policymaker at the BoE to vote against a plan to keep interest rates unchanged until unemployment fell to 7 percent. Weale said at the time he was concerned the plan could fuel inflation expectations.

The East Anglian Daily Times quoted Weale as saying a fall in inflation since then to the BoE's target of 2 percent was very welcome and something he had not foreseen.

Other BoE policymakers have said this week that there will be no immediate increase in interest rates, despite unemployment tumbling unexpectedly to 7.1 percent.

Weale told the newspaper he was against a lowering of the BoE's threshold for considering an interest rate hike which now looks set to be breached.

He was quoted as saying that setting a new threshold based on a lower unemployment rate would not help create certainty about the BoE's next steps, because it could be quickly overtaken by events.

On Thursday, BoE Governor Mark Carney said the Bank was likely to take a broader approach to gauging when the British economy is strong enough to cope with higher borrowing costs.

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