The Great Britain pound was rising today on signs of economic recovery, but retreated to settle near the opening level as Spencer Dale, Executive Director and chief economist of the Bank of England, signaled that reduction of monetary stimulus is not likely next year.
Spencer said today that policy makers need to see a “sustained period of strong growth” before tightening monetary policy. Earlier this week, he was also talking about small chances of stimulus reduction:
We need to see a sustained period of robust growth before the economy moves back into anything resembling balance.
Recent macroeconomic data from the United Kingdom was indeed hinting at recovery. Yet there was a string of negative reports not so long ago that suggested that economic growth is not as robust as investors have hoped for. It means that extremely accommodative policy will persist for a long time.
GBP/USD rallied from 1.6162 to 1.6224 intraday, but slipped back to settle at 1.6164. GBP/JPY closed at 158.15 following the advance from 158.23 to 158.65. EUR/GBP ticked up from 0.8458 to the closing price of 0.8463 after dropping to 0.8440.
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