Sterling rose and gilt futures fell on Wednesday after Bank of England minutes showed two policymakers felt the decision between raising rates or keeping them on hold was finely balanced.
Minutes of the Monetary Policy Committee’s May meeting also showed the bank’s rate-setters saw the possibility of a recent pick-up in British house prices posing renewed risks. The MPC voted 9-0 to keep the interest rates at 0.5 per cent for now.
“Looks a finely balanced decision for the usual two hawks,’’ said one London-based spot trader.
Sterling reversed earlier losses to hit the day’s high of $1.5535 from $1.5505 before the minutes’ release. It then edged down to $1.5522, flat on the day.
Against the euro, the pound hit 71.445 pence after the minutes, before weakening a little to 71.62 pence, still up 0.4 per cent on the day.
British government bond futures fell modestly after the minutes and were last down around 10 ticks on the day.
The FTSE 100 equity index remained down by 0.3 percent.