Sterling bounces as BoE hints at hawkish turn

The Bank of England's Monetary Policy Committee has become less concerned with deflation risks, according to it latest minutes, despite CPI inflation dropping to 0%.

The minutes from the meeting on 8-9 April show members voted unanimously for interest rates to remain at 0.5%. But the minutes also revealed the MPC is less concerned about deflation than it had been previously. The MPC added that, at the time of its meeting, "the path of bank rate expected by financial markets was now exceptionally flat", suggesting investors had become too dovish in their expectations over when rates would rise. That caused a jump in the value of sterling, up from $1.4930 to $1.5013, a rise of 0.6%. Chief economist Andy Haldane, who had previously said the nex...