Pound jumps as BoE hints at rate rise in May

The British pound passed $1.42 this afternoon following the Bank of England’s decision to keep interest rates on hold, yet with hints of a rise later this year.

For the time being, Britain’s central bank is keeping interest rates at 0.5%, and confirmation of the bank’s decision encouraged sterling to appreciate further, continuing a recent rally on the back of progress in the country’s Brexit negotiations with the EU. Sterling’s seven-week high against the dollar, shortly after noon on Wednesday, came as two members of the bank surprised investors by calling for a rate increase.

The BoE voted by 7-2 to leave rates on hold. However, lawmakers Ian McCafferty and Michael Saunders said economic conditions meant that time was ripe for rates to increase, prompting speculation that a rise will be on the cards in May this year. A hike in interest rates would be only the second raise since the financial crisis 10 years ago.

Against the dollar, sterling was worth $1.414 at the time of writing.

Christopher Copper-Ind
Christopher Copper-Ind is Editor of International Investment. He has extensive experience of the publishing industry having worked across the Middle East and Europe. He oversees the content across all its formats together with the business development for International Investment.

Read more from Christopher Copper-Ind

Close Window
View the Magazine

You need to fill all required fields!