The minutes from this month's meeting of the MPC were much more closely watched than previous months, particularly after recent comments from governor Mark Carney and MPC member David Miles. Miles, who is one of the more dovish members of the committee, indicated he would vote for an interest rate rise before his term on the MPC ends (in May) – while Carney said that the rise "could happen sooner than markets currently expect."
This was reinforced by the MPC stating that the "relatively low probability attached to a bank rate increase this year implied by some financial market prices was somewhat surprising."
After seven years without raising interest rates, the BoE is now widely expected to be one of the first central banks in the Western world to raise rates, after years of historically low rates in Europe, the U.S. and U.K. following the credit crisis. As such, it is likely to give other central banks a preview of how consumers and the credit markets will react.
"The Fed can look to the U.K. as the canary in the coalmine," strategists at UBS wrote in a research note.
In previous U.K. economic cycles, raising interest rates has been followed by slight dips in stock market performance, then a gradual rise upwards.