The Bank of England released the minutes of the Monetary Policy Committee meeting that was held on the 4th and 5th of June 2014. The key line from the BoE minutes is that the MPC members were surprised at the limited expectation from the market, that the MPC would raise rates before the end of the year.
relatively low probability of 2014 bank rate rise priced in by markets "somewhat surprising
Bank of England voted 9 – 0 to leave interest rates unchanged at 0.50% and asset purchases at £375bn.
Link to the Bank of England Minutes
Only 2 analysts in the Bloomberg survey voted for an 8 – 1 vote on rates, with the others all voting for 9 – 0.
Mark Carney spoke at Mansion House on the 12th June, which moved traders’ expectations of an interest rise forward, potentially before the end of the year. If the Bank of England does raise before the end of the year, it would be the first western central bank to begin tightening following the economic crisis.
In the FX markets Sterling was initially bid, and traded above 1.7000, however the move was short lived coming back to 1.6970, with this move priced in from Carneys comments last week.
Technical analysts believe the 1.7040 level is a major resistance level, the previous high in September 2009, a close above 1.7040 would target 1.75 as the next target.
Mark Carney Mansion House Speech (12th June 2014)