Bank of England Says Interest Rates Could Rise Within Months

By Jason Douglas Features Dow Jones Newswires

The Bank of England signaled Thursday that officials are preparing to raise interest rates within months to restrain accelerating inflation, a fresh sign that a decade-long era of ultraloose central-bank policy is slowly drawing to a close.

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The BOE held its benchmark interest rate steady following its September policy meeting but the rate-setting Monetary Policy Committee said in a statement that a majority of officials on the nine-member panel believe borrowing costs will soon need to rise to bring annual inflation back to its 2% goal.

Such a move, which would mark the first interest-rate increase in the U.K. in almost a decade, is likely "over the coming months," the panel said, if the economy performs broadly in line with officials' expectations.

Sterling rallied against the dollar and euro, climbing by 0.7% and 0.6% respectively to $1.329 and EUR1.117.

U.K. 10-year gilt yields jumped too, rising from around 1.13% before the announcement to 1.18% shortly afterward.

Write to Jason Douglas at jason.douglas@wsj.com

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(END) Dow Jones Newswires

September 14, 2017 07:27 ET (11:27 GMT)