Any change to rates would be linked to economic activity and Brexit outcomes, but Bank governor says still ‘too early’ to make that call
The governor of the Bank of England has sent the pound higher on the foreign exchanges after he warned that the continued growth in the UK economy would eventually lead to higher interest rates. Sterling rose by almost a cent against the dollar to stand at a post-election high on remarks seen as bringing forward the date of the first increase in the cost of borrowing since the start of the financial crisis 10 years ago.
Although Carney broadly reiterated his “wait and see” approach to interest rates, the pound was trading at just below $1.30 amid speculation that the Bank’s monetary policy committee would over the coming rescind the emergency quarter-point cut in interest rates after last summer’s Brexit vote.