The British pound rose as the Bank of England head hinted at a rate hike
Managing the Bank of England Mark Karni said Wednesday that the rise in interest rates in the UK in the next few months may be more appropriate if the economy continues to gain momentum despite the weak performance of consumer spending. After his words the British pound rose 1% against the US dollar.
During his speech at the forum of the European Central Bank in Portugal Carney said that in the case of accelerating the growth of wages and investment companies, he will think over whether to keep the Bank of England’s key rate at a record low of 0.25%. Earlier this month, Carney advocated the preservation of the previous monetary policy, since, in his words, the regulator had to balance between accelerating inflation and slowing economic growth in the UK.
Shortly after Carney’s comments British pound rose 1.1%, to 1.2954 US dollar, reaching its highest level in three weeks. The yield on 10-year UK bonds jumped to 1.181%, the highest since the beginning of May, against 1.078% at the close on Tuesday.
"Partial rejection of the stimulus measures are likely to be necessary, as the Bank of England will no longer have to make compromises, and the decision-making process will go to normal", – he said.
Comments Carney suggests that the Bank of England yet close to raising rates after reducing them after last year’s referendum on membership in the UK ES.Istochnik: “News Feed”
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