The value of the pound is jumping on Wednesday afternoon after Bank of England Governor Mark Carney hinted that he could be close to voting for a hike in interest rates during a panel appearance.
“Some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional,” Britain’s most senior monetary policymaker said while speaking on a panel at the European Central Bank’s Forum on Central Banking in Sintra, Portugal.
As recently as last week, Carney, who is one of the more dovish members of the bank’s Monetary Policy Committee, said that he was not ready to vote for a rate hike, but on Wednesday he sought to clarify his position, effectively saying that he would be ready to vote for a rise in rates if business investment begins to rise offsetting weaker consumption in the process.
Carney’s comments were taken positively by the market, with investors buying heavily into the pound as the governor spoke. Sterling jumped by close to 1% during Carney’s speech, passing comfortably above 1.29 against the dollar.
The chart below shows how sterling looks as of 2.50 p.m. BST (9.50 a.m. ET):
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