The pound rose for the first time in six days after Bank of England minutes showed concern among some policy makers that inflationary pressure may build, reducing the need to keep borrowing costs lower for longer.
U.K. government bonds fell as the minutes of the Nov. 5-6 meeting showed officials voted 7-2 to maintain the key interest rate at a record low this month, the same ratio as in October. The minutes contrast with a more downbeat assessment presented by Governor Mark Carney at the Nov. 12 Inflation Report press conference, when the BOE revised down its growth forecasts.
“Investors are reducing short-sterling positions on the BOE minutes,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. “There was an expectation of greater dovishness and a possible return to an 8-1 split.”