Earlier this week sterling had hits its highest level against the dollar since the June 2016 Brexit vote as trader bet heavily on another hike in the cost of borrowing next month
The pound fell sharply on Thursday evening after the Governor of the Bank of England, Mark Carney, cast doubt on another interest rate hike next month.
Speaking to the BBC in Washington, Mr Carney drew attention to the “mixed data” from the UK economy this week and said he didn’t want to be “too focused on the precise timing” of when rates might next rise.
- Sterling rises as Mark Carney signals hawkish stance on rates
- Mark Carney says Bank to revise up its GDP growth forecasts
- Mark Carney says inflation has further to rise
Earlier this week sterling had hits its highest level against the dollar since the June 2016 Brexit vote as traders bet heavily on another hike in the cost of borrowing coming in May, following last November’s increase.
But in the wake of the Governor’s dovish comments in fell sharply to $1.1409, down 0.61 per cent on the day.
“Prepare for a few interest rate rises over the next few years,” Mr Carney said, speaking on the sidelines of the IMF’s annual meeting in the US capital.
“I don’t want to get too focused on the precise timing, it is more about the general path. The biggest set of economic decisions over the course of the next few years are going to be taken in the Brexit negotiations and whatever deal we end up with. And then we will adjust to the impact of those decisions in order to keep the economy on a stable path.”
Earlier on Thursday retail sales data for March came in worse than expected. This followed a bigger than anticipated decline in inflation in March.
“We have had some mixed data,” Mr Carney said.
“On the softer side some of the business surveys have come off. Retail sales have been a bit softer – we are all aware of the squeeze that is going on in the high street. We’ll sit down calmly and look at it all in the round.”
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