The Great Britain pound strengthened against the US dollar and the euro today after Bank of England policy maker Andrew Sentance explained in his today speech the necessity of raising the interest rates.
In his speech at the Institute of Economic Affairs 2011 State of the Economy conference today Sentance said:
One of the benefits which we might see from a policy of raising interest rates is a modest appreciation of sterling, which would mitigate the impact of global inflationary pressures in the short term and help to steer inflation back to target over the medium term.
The BoE policy makers are still divided in their opinion regarding the best way to support UK economy, but today’s speech refueled hopes that the hawkish members of the Monetary Policy Committee will prevail.
GBP/USD rose from 1.6092 to 1.6128 as of 14:19 GMT today, while EUR/GBP declined from 0.8429 to 0.8414.
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