Despite a vote of seven against two to keep UK interest rates on hold at historic lows of 0.25% at this month's Monetary Policy Committee (MPC) meeting, the Bank of England has today indicated strongly that it is ready to begin lifting rates later this year. The MPC has also predicted that inflation is likely to reach over 3% in October, well above the 2% target, and is likely to remain above target for the next few years. The intention to hike rates was caveated, however, with the guidance that should there be a concatenation of bad economic data in the interim, a 0.25% rise would have to be reconsidered. The news has surpassed market expectations, with Sterling rising around 1% against the US Dollar, Euro and Japanese Yen immediately after the announcement. UK government debt has also seen a strong sell-off, with yields rising to their highest in over a month as prices fell. In equities, the FTSE 100 has fallen almost 0.9% as a stronger currency weakens exporters' profits.