Sterling volatile as MPC stays split over rates and QE

Sterling touched a three-month low against the dollar before rebounding as the Monetary Policy Committee (MPC) revealed continued division on interest rates while UK growth was revised down.

Minutes from the final meeting of the year of the Bank of England's nine-member MPC show the economists remain in a three-way policy split for the third straight meeting. However, a growing number of policymakers are worried about rising medium-term inflation risks. The pound initially fell against the dollar to $1.5426 on the news, its lowest since mid-September, before bouncing back to around $1.5440. Seven members of the MPC, including Governor Mervyn King, voted to keep the Bank's base rate at its historic 0.5% low, and maintain quantitative easing (QE) at £200bn. Adam Posen...