The pound showed mixed performance against its major rivals in the European session on Thursday, after the Bank of England raised its benchmark rate by 25 basis points and signalled further tightening if there are signs of persistent price pressures.
The nine-member Monetary Policy Committee decided to lift the bank rate to 4.25 percent from 4 percent. This was the highest rate since 2008.
Seven members of the panel voted for a quarter point hike, while Swati Dhingra and Silvana Tenreyro again sought to maintain the status quo.
Most of the members observed that headline inflation had surprised significantly on the upside and the near-term path of GDP was likely to be somewhat stronger than expected previously.
"Renewed and sustained demand for labor could still reinforce the persistence of higher costs in consumer prices, even if second-round effects related to energy price inflation were to diminish," the minutes said.
The MPC vowed to continue to monitor closely indications of persistent inflationary pressures, including the tightness of labor market conditions and the behavior of wage growth and services inflation.
"If there were to be evidence of more persistent pressures, then further tightening in monetary policy would be required," the panel said.
The pound pulled back to 1.2264 against the greenback, from a 1-1/2-month high of 1.2343 hit at 3:25 am ET. The currency may find support around the 1.19 level.
The pound touched 0.8865 against the euro, its lowest level since March 10. The pound had ended yesterday's trading session at 0.8845 against the euro. On the downside, 0.90 is possibly seen as its next support level.
The pound eased off to 1.1245 against the franc, heading to pierce a 6-day low of 1.1228 seen at 4:30 am ET. At Wednesday's close, the pair was worth 1.1239. The pound is seen finding support around the 1.11 level.
The pound rose to 161.84 against the yen, from a 3-day low of 160.68 it touched in the previous session. The pair was valued at 161.10 when it ended trading on Wednesday. The pound is likely to find resistance around the 164.00 level.
Looking ahead, Eurozone flash consumer sentiment index for March will be out at 11 am ET.
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