Not just one but two members of the Bank of England’s monetary policy committee voted to hike interest rates at the central bank’s August meeting as the UK economy continues to gather steam.
Sterling has bounced 0.4 per cent against the dollar to $1.6673 in response to the surprise news, the first divergence when the BoE should lift rates in more than three years.
Martin Weale and Ian McCafferty both voted to increase the benchmark rate by 25 basis points, while the other seven members of the committee voted to keep rates on hold.
Economists polled by Reuters had expected the MPC to vote unanimously to keep rates on hold.
Weaker than expected inflation figures on Tuesday reinforced forecasts that a rise in interest rates would be delayed until next year.
Traders saw the drop in consumer price inflation to 1.6 per cent in the year to July from 1.9 per cent the previous month as easing pressure on the Bank of England to act, in spite of the rapidly improving economy.
