020 7898 0500Yesterday started with a speech by Michael Saunders, a member of the BoE’s MPC. After predicting that inflation would hit 3% in the coming months, Saunders called for an urgent rise in UK interest rates. Unsurprisingly, Saunders has voted for a 0.25% hike in the last two MPC meetings.
The markets didn’t react in the way one might imagine them to, with the pound failing to lift in response. In fact, it actually weakened against the US dollar. A former member of the Bank of England’s MPC sent a Tweet that said a pound bought less than 0.95 euros at Heathrow yesterday morning as a result of Brexit and low interest rates.
Sterling’s weakness was compounded by comments made by Michel Barnier, who is the EU’s chief Brexit negotiator. He said that ‘no decisive progress’ had been made and the resultant uncertainty impacted the pound. It remains to be seen whether it can regain some ground before the week is out.
