Sterling slumps and FTSE jumps on surprise BoE rate statement

The Bank of England has said market expectations of future rate rises are "not warranted", sparking a drop in sterling and a 50 point jump in the FTSE 100.

Holding rates at 0.5% and QE at £375bn in its first meeting since Mark Carney's arrival as governor, the Bank also took the unusual step of issuing a statement alongside its decision. The BoE said "the implied rise in the expected future path of Bank rate was not warranted by the recent developments in the domestic economy". The change in that implied path, suggesting the UK base rate could rise in late 2014, had been triggered by signals the US Federal Reserve may slow down its own QE programme later this year. The suggestion that investors had got ahead of themselves pushed the F...