BoE hike: 'One of the most attractive set-ups' for bonds in decade

Alastair George, chief investment strategist at Edison Group, said: "Despite the government energy price guarantee mechanically lowering inflation in the short-term, the Bank of England is also warning this guarantee represents a fiscal stimulus which will need to be embedded into new inflation forecasts in November.

"In combination with the tightness of the labour market it expects this to add to domestic inflationary pressure in the medium-term – with the clear implication this period of tighter monetary policy may be further extended."

carmen.reichman@ft.com