Sterling exchange rates fall following Mark Carney’s comments

Sterling exchange rates fell sharply following comments from the Bank of England Governor Mark Carney yesterday. In an interview with the BBC Mr Carney said that interest rates are likely to increase this year but any increases will be gradual.

He continued to suggest that any interest rate hikes could be delayed by uncertainty surrounding Brexit and is dependent on a continuation of positive UK data. He said that some data had been “softer” such as retail sales and that inflation had fallen more rapidly than the Bank forecast in February.

Prior to his interview many analysts had expected the central bank to raise interest rates at their next meeting scheduled for the 10th May. But following the unexpected fall in inflation levels on Wednesday it seems now that the Bank of England could delay any movement until later this year, something that could keep the pound under check.

As a result sterling a has now fallen two cents against the Euro from Tuesdays high of 1.1580 and and over three cents against the US dollar to fall back to 1.4060 against Tuesdays high of 1.4380.

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