In a surprising turnout at this morning’s Bank of England rate decision, the bank voted 5-3 in favor of keeping rates flat. The surprising element is the fact that two additional members from the MPC dissented, as Michael Saunders and Ian McCafferty joined Kristin Forbes in voting for a rate hike at this morning’s meeting. This is likely at least somewhat attributed to the 2.9% inflation print that we saw earlier in the week, and in-turn the British Pound is gaining ground as traders begin to factor in higher rate expectations.

The bigger question is whether this trend has continuation power: Ms. Forbes, who cast the first post-Brexit vote for a rate hike at the bank’s meeting in March, is leaving the Monetary Policy Committee at the end of this month. So, one of those three votes will no longer be voting. And the Bank of England has been extremely dovish in the wake of Brexit under the presumption that longer-term risks needed to be met with a passive stance towards inflation; and this was echoed by BoE Governor Mark Carney as recently as last month at ‘Super Thursday’.

This passive stance has been rather clear from the BoE since even before the Brexit referendum. Ahead of the referendum, Mark Carney warned that Brexit would entail a ‘sharp repricing’ in the value of the British Pound, and that could lead to higher levels of inflation. As U.K. voters elected to split from the EU, the value of GBP dropped dramatically; but it was the ensuing campaign from the BoE in the months after the referendum that really drove the currency-lower, and of recent, we’ve started to see the corresponding move in higher prices.

This theme of GBP-weakness on a persistently dovish BoE lasted until Theresa May announced early general elections in mid-April of this year; at which point the Pound popped-higher as traders unwound short positions. Strength remained in GBP/USD until polls began to indicate that Tories may not have the easy walk in the park towards gaining a super majority that many had thought when Ms. May initially made that announcement; and after last week’s election, Cable dropped back-down below the 1.2750 psychological level.