The Bank of England (BOE) held interest rates steady at 0.25 percent on Thursday, though an unexpected surge in support for a rate hike among its committee policymakers sent sterling higher.The central bank was widely expected to remain cautious at its latest monetary policy committee meeting, particularly given the inconclusive election last week and the precarious position of the U. economy ahead of Brexit talks.However, two BOE rate-setters joined last month`s sole dissenter, Kristin Forbes, in voting for a 25 basis point rate hike. Michael Saunders and Ian McCafferty - the policymakers identified as the most likely to push for an increase in interest rates - defied Governor Mark Carney`s proposition for the bank rate to be maintained at 0.
"Despite elevated political and economic uncertainty, the Bank of England seems to be heading for a first rate hike soon," Kallum Pickering, senior U. economist at Berenberg, told CNBC in an email."Today, three members – all known hawks – voted for higher rates. This gradual shift in stance represents the Monetary Policy Committee`s efforts to foretell and communicate a forthcoming hike. Don`t ignore it," he added.The 5-3 vote split among the committee represented the closest the monetary policy committee had come to supporting a rise since 2007. The BOE currently only has eight members after Charlotte Hogg stepped down in March.Had rate-setters voted 4-4 to lift interest rates by 25 basis points, Carney would have ultimately decided the outcome. The BOE`s last monetary policy move came back in August last year when Carney announced an emergency rate cut following the U.`s vote to leave the European Union.
Meantime, the Committee voted unanimously to maintain corporate bond purchases at £10 billion (12.Further to this, all rate-setters supported keeping the stock of U. government bond purchases unchanged at £435 billion.Inflation soars as sterling depreciates.
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