A jump in the pound a minute before the Bank of England said it would keep interest rates on hold led some in the market to ask whether any participants knew of the decision before it became public.
The Bank of England and the Financial Conduct Authority (FCA), Britain’s main market regulator, both declined to comment on whether they were investigating the sudden move.
“There were a few gasps around the room when we saw the price jump quite aggressively,” Simon Harvey, of Monex Europe, a brokerage in London, said.
“We are not used to seeing a big jump beforehand and so it raised eyebrows,” he said. Markets had been on tenterhooks before the Bank of England meeting, as money markets had seen equal chances of a 25 basis point rate cut or no change in British borrowing costs.
Not all analysts saw the surge as suspicious, as thin liquidity before the bank’s decisions means a small number of orders can have an outsize impact on prices.
Neil Jones, head of FX hedge fund sales at Mizuho Bank said market gyrations in the seconds before major announcements were not uncommon, adding: “They are not always correlated with and predictive of the event.”
However, sterling’s move surprised some traders as it happened just before the bank’s 1200 GMT decision and was bigger than the reaction after the announcement.
Last year, the Bank of England said a rogue supplier had been misusing audio feeds from its news conferences, giving traders access to information ahead of rivals.