The Bank of England warned investors today they were being too quick to price in a rise in interest rates, as new Governor Mark Carney began to deploy a strategy of giving guidance on what monetary policy has in store.
The Canadian took over the Bank of England just four days ago.
But he persuaded the bank's top policymakers to issue a statement which said a recent rise in bond yields had gone too far, given the still weak state of Britain's economic recovery.
It came after the bank left its key rate unchanged at 0.5%, which traditionally has meant no statement.
The nine-member Monetary Policy Committee also signalled it could start giving more explicit guidance on interest rates as soon as next month.
A little later, European Central Bank President Mario Draghi also broke with tradition to give forward guidance, but said it was a "coincidence".
The surprise announcement immediately weakened sterling and pushed up the price of shares and British government bonds.
Carney and his fellow policymakers at the Bank of England said the "significant upward movement" in yields would weigh on the central bank's expectations for growth and inflation which, for now, remained unchanged.
"In the Committee's view, the implied rise in the expected future path of Bank Rate was not warranted by the recent developments in the domestic economy," the statement said.
As widely predicted, the bank voted against reviving its bond-buying programme and kept interest rates unchanged from 0.5%, where they have remained since 2009.
A recent run of better-than-expected data had help push up borrowing costs in financial markets on hopes that the UK economy is finally on the mend after two years of stagnation, and five years after the financial crisis struck.
The pound fell to a one-month low against the dollar and British government bond yields fell sharply after the Bank of England moved to push back expectations of when it might eventually raise rates.
Markets are now pricing in the first interest rate rise by the Bank of England in the second half of 2015, rather than in the first half as thought before today's announcement, analysts said.
Carney has been tasked with speeding up Britain's sluggish economic recovery. Britain's finance minister George Osborne asked him to report back next month on whether the BoE should give more detailed guidance on the future path of interest rates.
The monetary policy committee said this debate "would have an important bearing" on its August 1 policy discussions.
In 2009, the Bank of Canada - under Carney as its governor - said it would keep interest rates low for more than a year in an attempt to give more confidence to businesses and households as the financial crisis hammered the global economy.
Some economists said the statement might also herald a restart of bond-buying by the central bank under Carney.