Investors hoping the Bank of England may follow the U.S. Federal Reserve in an expected interest rate rise this year look set to be disappointed after the U.K. central bank voted 8-1 to hold rates
The Bank's Monetary Policy Committee (MPC) voted to keep interest rates at their all-time low of 0.5 percent Thursday, as expected. The MPC also implied those betting on a first-quarter rate rise in 2016 may be disappointed in its minutes, by suggesting current market pricing (for a May rise) is "consistent with an improvement in sentiment".
Ian McCafferty was the only member who voted to raise rates, by 0.25 percent. This is likely to surprise BoE watchers, as he had been expected to be joined by at least one more hawk, probably Martin Weale.
The more dovish-than-expected tone of the report suggests that the Bank's first interest rate rise will come later than previously forecast. Many investors had factored in a rise in February next year.
Following the rate decision, sterling fell sharply against the dollar, off 0.7 percent on the day at $1.54.
Rather than be staggered over a few weeks, the Bank's interest rate decision, the MPC minutes and its quarterly analysis of the U.K.'s economy have all been released at the same time in what has been dubbed as "Super Thursday". The data dump is part of what Governor Mark Carney hopes will be a new era of transparency at the bank.