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Pound jumps following Bank of England MPC meeting

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🇬🇧 GBP – Three Bank of England officials have called for UK interest rates to rise, in a surprise move that signals policymakers are becoming more concerned about higher inflation, even as the economy slows. Bank policymakers voted 5-3 on Thursday to keep interest rates on hold at a record low of 0.25pc.

External members Ian McCafferty and Michael Saunders joined MIT professor Kristin Forbes in voting to raise rates by 0.25 percentage points to 0.5pc.

The last time there were three dissenting votes to tighten policy was May 2011.

The Monetary Policy Committee (MPC) said inflation had picked up more quickly than expected since its last economic forecast in May.

Inflation, as measured by the consumer prices index (CPI) stood at 2.9pc in May.

All of the above being said, apart from the lows seen in the earlier part of this week, we’re still down at levels last seen at the end of March against the euro. Against the US dollar, the GBP seems to react better to stimulus and the position is back to where we were about 6 weeks ago.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.