LONDON: Sterling retreated to be lower on the day on Wednesday after a brief surge following minutes from the Bank of England that offered mixed messages on the chances of a rise in interest rates this year.
The pound hit a day's high against both the euro and dollar immediately after the minutes of the bank's last meeting showed some policymakers drifting closer to a rise in rates than they had been in the past two months.
Backing comments last week from Governor Mark Carney that sent the pound soaring, the bank's 9-strong policy committee said they were surprised that markets had priced in a relatively low chance of an interest rate rise in 2014.
But the meeting took place before yesterday's slide in inflation to a new five-year low and the minutes also showed members agreed that, in the absence of inflationary pressures, it would be necessary to see more evidence of economic slack being absorbed before raising rates.
By 0949 GMT sterling was down 0.1 percent on the day against both the euro and dollar at $1.6950 and 79.94 pence respectively.
It had risen as high as $1.7005 initially after the minutes.
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