Sterling rose to session highs, while gilt yields ticked up, after the Bank of England gave its strongest signal in years that a rate rise is on the way.

The pound was up 0.44 per cent in recent trade to $1.3267, from $1.3212 before the BoE decision.

UK equities took a fall after sterling began creeping higher. The large-cap FTSE 100 index was recently down 0.64 per cent, having traded modestly higher previously. British multi-nationals are thought to be hit by a stronger currency since it cuts the value of foreign sales and reduces demand for UK goods by making them more expensive.

In fixed income, the yield on the 10-year gilt climbed as much as 0.034 percentage point to 1.179 per cent, the highest level in five weeks, according to Reuters data.

More: BoE votes 7-2 to keep rates on hold, but prepares market for a rise

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