Bank chiefs at odds over interest rates as sterling pounds dollar
Bank chiefs disagree on interest rates as pound hits 10-month high against dollar as recession fears ease
- Sterling rose to $1.2521; it was also up to €1.1453 against the euro
- The British pound is up more than 20% since falling to a record low after the mini budget
The pound surged to a 10-month high against a weakening US dollar, even as Bank of England officials disagreed on the outlook for interest rates.
With UK recession fears abating and US investor bet rates at or near a high, the British pound rose to $1.2521.
It was also up to €1.1453 against the single currency. The pound has not been this high against the dollar since June 2022, before it was hit by the turmoil surrounding Liz Truss’s premiership.
The pound shot to a 10-month high on Tuesday against a weakening US dollar
Sterling has now gained more than 20 percent since falling to a record low of nearly $1.03 last September in the wake of the mini-Budget last September.
The latest rally came as two bank officials gave a starkly different analysis of the outlook for UK interest rates.
Speaking in Glasgow, Silvana Tenreyro said rates may need to be reduced soon as they have been raised from 0.1 per cent to 4.25 per cent since December 2021.
But Bank chief economist Huw Pill said with inflation still above 10 percent, the “job remains to make sure enough is done” to get the job done.