U.K. Rate-Hike Expectations Brought Forward

Bank of England minutes' hawkish stance increases speculation of an earlier interest-rate rise

Investors brought forward their expectations for a rate increase by the Bank of England after policy makers said they saw scope to reduce stimulus in the coming months. Overnight indexed swaps show Governor Mark Carney and his policy committee will raise the benchmark bank rate by February, 12 months earlier than what was priced at the end of last week. However, the pound’s 3 percent rally against the dollar this month could actually reduce the need for higher interest rates, said John Davies, a strategist at Standard Chartered Plc.

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