Sterling predicted to rise on interest rate speculation
Sterling may gain against a basket of currencies say analysts, after the Bank of England's (BoE) chief economist warned that rate setters need to tread carefully to avoid inflation.
In early currency exchange trading today, the pound was trading at 67.03p against the Euro, down 0.3p from last night and was at $1.87 against the dollar.
"If inflation has settled above target, a deeper or more prolonged slowdown is potentially required to bring it down," said BoE economist Charles Bean. "It is better to err on the side of caution," Mr Bean said in a speech about globalisation and inflation at the London School of Economics, report Forbes.
Notes released by the BoE's rate-setting monetary policy committee revealed that two of its nine members voted for an increase in interest rates earlier this month.
The pound gained against the euro following the release of the notes, while a government report also showed faster than expected growth in the third quarter.
Economists are near-unanimous in predicting interest rates to rise to 5.0 per cent in November with market odds on 5.25 per cent by June next