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Sterling Gains As Vlieghe Raises Prospect of Earlier Rate Hike

GBP

GBP inches higher, boosting the currency to the best levels of the session against both the EUR and USD, with Gilt futures also trading under pressure as BoE's Vlieghe begins to put timelines on the prospect of rate hikes in the UK.


Vlieghe says:

  • The first rise in the bank rate is likely to become more appropriate only well into next year, with some modest further tightening thereafter
  • An early rate hike is possible if a smooth furlough transition takes place
  • Will probably take until Q1 of 2022 to have a clear view of the post-furlough unemployment and wage dynamics, so a rise in the bank rate could be appropriate soon after
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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