The central bank's monetary policy committee, known as Copom, meets eight times a year.
This was expected to increase pressure on the Monetary Policy Committee to start raising interest rates.
Mr King and Monetary Policy Committee colleague Martin Weale said they were watching inflation expectations closely.
The rally also came ahead of Tuesday's meeting of the Federal Reserve's monetary policy committee.
As we know, a majority of his colleagues on the Monetary Policy Committee disagree.
By contrast, the monetary policy committee has shown its willingness to act preemptively.
The Bank's monetary policy committee (MPC) voted earlier this month not to change its current policy position.
"It does, however, potentially give the Monetary Policy Committee more flexibility to ease monetary policy further, " he added.
Two of the Bank of England's Monetary Policy Committee members voted for a rise at their last meeting.
But the betting must be that the Monetary Policy Committee will step up to the plate this week.
Three members of the Monetary Policy Committee voted for more quantitative easing last month - including the Governor himself.
The meeting minutes from Copom, the monetary policy committee, show they are on their way to accomplishing that task.
Sir Alan Budd, who was on the first Monetary Policy Committee in 1997, is promoted to knight grand cross.
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Still, few economists expect the Bank's monetary policy committee to change rates at its next meeting, on January 8th.
However, for the previous three months, three members of the Bank's rate-setting Monetary Policy Committee have voted to increase rates.
Indeed, many in the City think the Monetary Policy Committee might vote for more quantitative easing as early as tomorrow.
Adam Posen, a member of the Bank of England's Monetary Policy Committee, lamented that fact in a speech in October.
Earlier this month, the Bank's monetary policy committee voted again to maintain interest rates at the record low of 0.5%.
In the summer of 2008, the Monetary Policy Committee (MPC) was still debating whether to raise interest rates to confront inflation.
Ben Broadbent, from the Bank of England's Monetary Policy Committee, has a good go at this in his latest speech.
Minutes of the Bank's last Monetary Policy Committee meeting indicated that the Bank is looking at the possibility of more QE.
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But the monetary policy committee know that rising commodity prices could yet come to bite us in the next few months.
Evidence of continuing strength in the housing market poses a problem for the Bank of England's Monetary Policy Committee this week.
Sir Mervyn appeared at the committee along with Bank official Paul Fisher and monetary policy committee members Martin Weale and Ben Broadbent.
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The report also revealed that the Bank's Monetary Policy Committee was divided over the economic outlook, primarily due to uncertainty about sterling.
He also announced that the Bank of England Monetary Policy Committee had been given an updated broader remit, but keeps its 2% inflation target.
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Its monetary policy committee held an unscheduled meeting on Monday, after which it insisted the bank will stick to its current forecasts.
The Bank of England's Monetary Policy Committee (MPC) kept interest rates at the record-low level of 0.5% at its meeting in June.
The only question is whether the Monetary Policy Committee votes to push the bottom today - or at their next meeting in November.
More borrowing figures like that and the only question will be when the Bank's monetary policy committee decides to push interest rates up again.
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