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.
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.
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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.
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(END) Dow Jones Newswires
September 14, 2017 07:27 ET (11:27 GMT)