Pound to euro exchange rate today: Sterling rises amid higher chance of interest rate hike | City & Business | Finance

Sterling finished up at 1.2715 against the US dollar and 1.1358 against the euro, after outgoing Bank of England policymaker Kristin Forbes said a rate hike should not be delayed any longer.

Ms Forbes has now left the Bank of England’s Monetary Policy Committee (MPC) but was one of three members who called for an immediate interest rate rise in June.

In a speech this week the economist asked: “Why are central banks so reticent to raise rates given their experience that interest rates at such low levels, especially for a prolonged period of time, can increase risks – such as fostering financial market bubbles and unsustainable borrowing, supporting an inefficient allocation of resources, and creating challenges for pension funds, savers and banks?”

She added: “In my view, the “lift-off” of UK interest rates should not be delayed any longer.

“Many of the factors that have justified keeping interest rates at emergency levels over the past few years have become less potent, and sterling’s depreciation has fundamentally shifted underlying inflation dynamics in a way that makes it more pressing to begin this voyage soon.”

The comments came just a day after another rate setter and Bank of England chief economist Andy Haldane said he could soon be ready to vote for a rate rise.

Markets are now pricing a 60 per cent chance of a rate hike this year.

David Madden, market analyst at CMC Markets UK, said: “The GBP/USD continues to creep higher as the hawkish commentary from Bank of England (BoE) members, Andy Haldane and Kristin Forbes in the past two days helped the pound.

“Ms Forbes is leaving the Bank of England this month, but she used her speech at the London Business School last night as an opportunity to voice her opinions on interest rates in the UK.

“The BoE shouldn’t wait too late to lift off, is what Ms Forbes believes.

“Mr Haldane is of a similar view and he feels that keeping rates at these levels for too long will be a problem, as inflation is creeping…

Read the full article from the Source…

Leave a Reply

Your email address will not be published. Required fields are marked *