020 7898 0500The end to an impressive week for sterling saw BoE policymaker Gertjan Vlieghe suggest that UK interest rates might need to be raised and – importantly – said the Monetary Policy Committee are unlikely to stop at one rate hike. This came a day after Governor Carney acknowledged that rates might have to increase soon.
Sterling continued its rally against the US dollar as a result and hit its highest level since the day of the EU referendum result. However, not everybody is convinced that the sentiments expressed are genuine; it’s entirely possible that MPC members are talking up the UK economy to strengthen sterling without actually doing anything. It makes for a fascinating build up to the next rate decision.
Today we’ll see Carney deliver his speech which could well enable sterling to continue its momentum. On Wednesday we’ll see retail sales, while Friday has the quarterly and annual GDP growth rate. It will be fascinating to see whether the figures support what BoE members have been saying about the UK economy.
The chart belows shows sterling movements against the dollar from Friday 8 September until today. As you can see, it really was a good few days for the pound.
