Sterling hits 7-week high as Bank of England keeps rates steady

But hints at interest rate rise in May

The Bank of England’s Monetary Policy Committee has kept rates steady despite two of its policymakers unexpectedly voting for an immediate rate rise.

The committee voted 7-2 to keep rates at 0.5 per cent, but also said that “ongoing tightening” was likely to be needed to return inflation of 2.7 per cent back to target.

MPC vote by a majority of 7-2 to maintain #BankRate at 0.5% pic.twitter.com/XQohXbQRa0

— Bank of England (@bankofengland) March 22, 2018

Meanwhile, Sterling has risen to €1.1489 against the euro, its highest levels since January 25th.

Ian McCafferty and Michael Saunders, who were the first officials to call for rates to rise in 2017, said it was now time for rates to increase again for only the second time since the 2008 financial crisis.

The BoE had earlier said that it wants to see wages grow before it starts to hike rates to bring inflation levels back down to target.