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Bank of England May Hike Rates Within Months

  • Majority of MPC says reduction in stimulus may be needed
  • Brexit means ‘considerable risks’ to economic outlook remain
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BOE Holds Interest Rates Unchanged in 7-2 Vote

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Signaling that inflation is overtaking Brexit-related slowdown as an economic risk, Bank of England policy makers said they’re headed toward raising interest rates for the first time in more than a decade.

The pound surged and gilt yields jumped as investors anticipated rates may increase as soon as November, far earlier than the previous consensus. That came after the BOE revealed that for a majority of policy makers, “some withdrawal of monetary stimulus was likely to be appropriate over the coming months in order to return inflation sustainably to target.”