The pound has pushed higher against major currency pairs, such as the US Dollar, following the Bank of England's (BoE) decision today to keep interest rates on hold at 0.5 per cent. The rise comes as three out of nine members of the Monetary Policy Committee voted for a June hike, leading markets to believe the chances of an August hike of 0.25 per cent have now increased. The previous month, only two members had backed a rate hike. The BoE also says it could start shrinking its balance sheet once interest rates have been set around 1.5 per cent, down from the previously stated 2 per cent target, though the economic environment at the time will have to be considered. Despite the relatively vague display of intent to continue monetary policy tightening, the slightly more hawkish stance has seen the pound strengthen and UK government debt sell off to a degree. The rise of the pound has also sent the FTSE 100 lower as a stronger currency diminished foreign earners overseas revenue.
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