The surprisingly hawkish Bank of England minutes drove the British pound higher against all of the major currencies.

The monetary policy committee voted 7-1-1 to keep interest rates unchanged last month.   Although 2 dissenters were widely expected, no one believed that one of the dissenters would have favored a rate hike.  Besley, broke from the mold to call for a 25bp rate hike to "to keep medium-term inflation expectations anchored and ensure the Committee's credibility."  This three way split highlights how difficult monetary policy decisions have become for the Bank of England.  Their problems are the same as everyone’s, albeit at a greater degree; inflation is hot, while growth is not.  Retail sales are due for release tomorrow and they will play a big role in determining whether the British pound can hold onto its gains.  The highest level of unemployment claims since the 1990s and the weakest level of consumer confidence in 28 years suggest that retail sales will have dropped significantly in the month of June.