BoE surprises markets with hawkish rates vote

Expectations for a UK interest rate rise have jumped sharply following today's meeting at the Bank of England (BoE) where the closest vote in six years was had. Three members of the Monetary Policy Committee wished to raise rates this month from their record lows citing rising inflation, causing market expectations for a rise next month to jump to around 50%, up from 10% before the meeting. The FTSE has already come under pressure today from continued post-election fallout, recent downbeat economic figures and troubles in the mining sector that makes up a significant share of the FTSE 100. UK government debt has come under particular pressure as the idea of an interest rate rise makes fixed interest assets less attractive, leaving the UK 10 year yield, which moves inversely to price, up over 10% on the day. Sterling has reversed losses on the day and strengthened from the news of heightened rate hike expectations.