Bank chiefs at odds over interest rates as pound hits ten-month high against the dollar as recession fears ease
- Sterling rose as high as $1.2521; it was also up to €1.1453 against the euro
- Sterling has gained more than 20% since falling to record low after mini-Budget
The pound raced to a ten-month high against a weakening US dollar even as Bank of England officials clashed over the outlook for interest rates.
As fears of a recession in the UK ease, and investors bet rates in the US are at or close to a peak, sterling rose as high as $1.2521.
It was also up to €1.1453 against the single currency. The pound has not been that high against the greenback since June 2022 before it was hit by the turmoil of the Liz Truss premiership.
The pound raced to a ten-month high against a weakening US dollar on Tuesday
Sterling has now gained more than 20 per cent since plunging to a record low close to $1.03 in the wake of the mini-Budget last September.
The latest rally came as two Bank officials offered a starkly different analysis of the outlook for interest rates in the UK.
Speaking in Glasgow, Silvana Tenreyro said rates may soon need to be cut, having been raised from 0.1 per cent to 4.25 per cent since December 2021.
But Bank chief economist Huw Pill said that with inflation still over 10 per cent, the ‘onus remains on ensuring’ enough is done ‘to see the job through’.