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Sterling jumps a cent as three BoE officials support rate rise
June 15, 2017 / 11:25 AM / 5 months ago

Sterling jumps a cent as three BoE officials support rate rise

LONDON (Reuters) - Sterling surged as financial markets moved to price in a greater chance of a rise in British interest rates this year on Thursday, spurred by as many as three members of the Bank of England’s policy committee surprisingly voting for a hike.

A woman poses with a Bank of England twenty pound note bearing the image of Edward Elgar in Edinburgh, Scotland June 29, 2010. REUTERS/David Moir

Trading below $1.27 before the Bank’s decision, the pound surged by a full cent to $1.2795 after it emerged that Ian McCafferty and Michael Saunders had voted with Kristin Forbes for higher rates.

Short sterling contracts for December of this year moved 6 basis points, raising the likelihood attached to a rise in the bank’s main interest rates before the end of 2017. <0#FSS:>

Britain’s main FTSE 100 index extended losses to hit a session low, down 1.1 percent, after the release, which deepened a slump in mid-caps, already seeing the sharpest one-day fall in nearly a year, down 1.9 percent.

Two-year gilt yields hit their highest since May 10 as prices tumbled and the euro zone’s benchmark German 10-year bond yield also hit a day’s high of 0.265 percent.

Reporting by Helen Reid, Ritvik Carvalho, Patrick Graham and John Geddie

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