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BOE Meeting delivers shock

The possibility of the Bank of England raising interest rates to prop up the pound helped steady the currency on Friday at more than 1.5 percent above its low point for the week.

Sterling surged to its highest in a week against the euro yesterday after it emerged that three members of the Bank of England’s policy committee had voted for a rise in interest rates.

At a time when the BoE has blamed a rise in inflation past its 2 percent target on a weak pound, traders read the split vote as a warning that officials could seek to defend the currency with rhetoric or action, even as the economy overall slows.

Talks between British Prime Minister Theresa May’s Conservatives and Northern Ireland’s Democratic Unionist Party on a deal to prop up May’s minority government are ongoing, a senior Conservative source said this morning.

May is seeking an agreement with the DUP, which has 10 seats in parliament, that would allow her to pass her legislative agenda next week after she failed to win an outright majority in last week’s national election.

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