The Governor of the Bank of England, Mark Carney, has raised the prospect of the removal of some UK monetary stimulus, sending the pound up sharply.
Speaking at a European Central Bank forum in Portugal, Mr Carney seemed to strike a more hawkish tone than his recent comments, saying "some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional".
Sterling jumped by more than a cent against the dollar to $1.2930 in response.
The comments come after the Bank of England's chief economist, Andy Haldane, surprised traders by saying he was ready to raise rates, having previously positioned himself at the dovish end of the spectrum on rates.
The Bank's rate-setting MPC split 5-3 earlier this month over whether to raise rates from 0.25 per cent to 0.5 per cent
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