As widely expected interest rates in the UK have remained at 0.5% by the Bank of England today, however, what is interested in that the vote changed from a majority of 7-2 to 6-3. Andrew Haldane, the chief economist, has changed his vote from interest rates remaining as they are to an increase. This is important because it is the first time the chief economist has dissented in seven years, and this wasn't anticipated by markets. This has increased the probability of an interest rate rise later in the year, with August and November the more likely times to see a move. We believe in waiting to November would make more sense, when we have a clearer picture on what Brexit actually means. There has been an immediate knock on impact in markets with UK bond yields moving higher and sterling appreciating on the news. The FTSE 100 has moved lower due to the negative impact on oversees earnings for UK businesses because of a stronger pound.
