Sterling climbed to an eight-month high on its trade-weighted index against a basket of currencies yesterday, following publication of minutes of the nine-strong MPC's September 3 and 4 meeting.
These minutes signal a diminished appetite for immediate further monetary stimulus among a minority on the MPC which had until June been pushing for a further £25 billion increase in the Bank's quantitative easing (QE) programme to take it to £400bn.
The minutes also highlight MPC members' discussions about stronger indicators of UK economic activity and a better-than-expected showing by the eurozone. However, they also flag up a focus by the committee on weaker signs from some emerging economies.
Detailing MPC members' deliberations about the state of the UK housing market, the minutes state: "Since the spring, and after several years of stasis, activity in the housing market had been picking up and, on the basis of recent indicators, gaining momentum.
"Although still well below pre-crisis norms, monthly mortgage approvals had increased by almost a third over the past year. And, according to the average of the main lenders' indices, nominal house prices in July stood around 4% higher than a year earlier and so had begun rising in real terms for the first time since mid-2010."
MPC members noted the potential boost to consumer spending from a stronger housing market. But they also flagged a view that a sharp rise in house prices, in inflation-adjusted terms, could be a potential problem.
Providing further detail of MPC members' discussions about the housing market, the minutes state: "Increased housing market activity had the potential to support dwellings investment and spending on associated services, thereby boosting growth overall. And some rise in prices might provide a modest fillip to consumer spending and investment if, for example, the increase in collateral values helped to relax households' and small businesses' credit constraints.
"Nevertheless, the committee noted that property market developments would become more of a concern if a period of rapid real house price increases appeared in prospect. The committee noted the fact that the Financial Policy Committee and the Prudential Regulation Authority now had a range of instruments they could deploy to mitigate this."
Bank of England Governor Mark Carney said last month that the Old Lady of Threadneedle Street was "acutely aware" of the risk of unsustainable growth in UK house prices and credit, and would monitor it closely.
The minutes also hammer home the point, in the context of the Bank's new forward guidance, that a fall in the International Labour Organisation measure of unemployment to 7% will not automatically trigger a rise in base rates.
The MPC was unanimous two weeks ago in its votes to hold UK base rates at their record low of 0.5%, at which they have stood since March 2009, and to maintain the QE programme at £375bn.
QE is aimed at stimulating activity by boosting money supply through the purchase of Government and corporate bonds, funded using central bank reserves.