Analysts at RBC Capital Markets say that the fact that British pound reached yesterday 13-month maximum versus the greenback means that investors believe that the Bank of England Governor Mervyn King won’t be able to keep interest rates from rising.

The head of the Britain’s central bank is cautious about raising interest rates as it may hamper already weak country’s economic growth – in the fourth quarter of 2010 UK GDP contracted by 0.6%. However, the number of BoE Monetary policy Committee members in favor of the rate hike increases.

According to the minutes of the MPC meeting that took place on February 10, BoE Chief Economist Spencer Dale joined policy makers Andrew Sentance and Martin Weale in voting for an interest-rate hike from the current 0.5% level as British inflation pace accelerated in January to 4%, 2 times higher than the target level.

RBC specialists underline that since 2003 King has been outvoted already twice. As sterling’s strengthening the market becomes more convinced that King will either be offside again or capitulate.