Bank of England hints at rate rise

Despite the Monetary Policy Committee voting 9-0 in favour of leaving interest rates at 0.5% this month, the minutes from the meeting suggest an increase could occur before the end of the year.

Committee members expressed surprise that there was little expectation of a rate rise by the end of the year.

The minutes said: "There was a risk that growth would not slow in the second half of the year so that, without a corresponding rise in supply, slack would be absorbed more quickly than had previously been expected.

“In that context, the relatively low probability attached to a Bank rate increase this year implied by some financial market prices was somewhat surprising."

Mark Carney said last week that a rise “could happen sooner than the markets expect,” yet he added that any policy tightening will be “gradual and limited.”