LONDON (REUTERS) - British unemployment appears to be falling slightly faster than forecast against a backdrop of stronger-than-expected growth, Bank of England policymakers concluded at their October rate-setting meeting.

The unemployment rate has dropped to 7.7 per cent from 7.8 per cent at the time the BoE made forecasts in August predicting it would take three years to fall to the 7 per cent rate at which it will start to consider interest rate rises.

"It now therefore seemed probable that unemployment would be lower, and output growth faster, in the second half of 2013 than expected at the time of the August Inflation Report," minute of the Monetary Policy Committee's Oct 8 to 9 discussion showed.

The MPC voted unanimously to keep interest rates on hold, with no signs that any of the 'knock-out' clauses that can void the forward guidance policy were close to being breached.

However, policymakers remained divided about how rapidly productivity would pick up, and by extension, how fast unemployment will fall as the economy recovers.

"It was too soon to draw a firm conclusion from recent labour market outturns about the extent to which productivity would increase," the minutes said.

Bank of England staff forecast that the economy would grow by 0.7 perc ent a quarter of slightly faster in the second half of 2013, a stronger growth rate than assumed in August.

The central bank also noted a strengthening in sterling, which would push down on inflation.

The BoE's long-term goal remains to return consumer price inflation to 2 per cent, without causing unnecessary volatility in growth. Inflation has exceeded 2 per cent since December 2009, and currently stands at 2.7 per cent.