Economic news

Pound gains as UK inflation holds steady

The pound firmed on Tuesday after fresh figures showed British consumer-price growth held steady at 3 percent in January, confirming traders’ bets that the Bank of England will increase interest rates as soon as May.

Photo: Reuters

The British currency soared to $1.3924 after the Office for National Statistics report. Versus the euro, the pound rose by a third of a percent to 88.59 pence.

Bank of England Governor Mark Carney stated last week that the regulator may need to tighten monetary policy more quickly than expected, triggering a hawkish repricing of market interest-rate forecasts.

Sterling dipped to a three-week trough versus the greenback on Friday after the EU’s chief Brexit negotiator Michel Barnier said disagreements in negotiations on transition deal were not resolved.


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    Pound rose modestly against the dollar. When there is a threat of higher volatility over financial markets, neither the monetary restriction nor the "hawkish" rhetoric of the Bank of England are able to return the interest of non-residents to the assets of British issuers. Moreover, a trade deal between London and Brussels remains in question.


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