BOE Holds Interest Rates Unchanged in 7-2 Vote

The Bank of England has kept rates unchanged at 0.25% and maintained its asset purchase targets. Despite a 7-2 vote on rates, the market is reacting with a spike in Sterling, driven by expectations of stimulus reduction. The Bank of England suggests the market is underpricing future rate hikes, with an 80% probability of a hike in February. However, market participants remain skeptical about the likelihood of imminent rate increases.

What is the current rate set by the Bank of England?

What are the asset purchase targets mentioned in the text?

What was the vote outcome regarding the rates?

What is the market's expectation regarding future interest rate hikes?

How does the market perceive the likelihood of the Bank of England hiking rates in the near future?