McCafferty speech boosts Sterling

Sterling hit a two-week high today after a top policymaker said the Bank of England should not delay in raising interest rates after a recent strong pick-up in the world economy.

Ian McCafferty, one of the two members of the nine-strong Monetary Policy Committee who voted for a rate rise last month, said in an interview that wage growth might prove stronger than most of his colleagues thought, adding to the pressure that inflation is running about the BoE’s target.

The BoE raised rates for the first time in more than a decade in November and a recent string of strong data including house price data on Monday have virtually sealed the case for a second rate increase in May.

The Bank of England should not delay raising interest rates again, he said, pointing to the possibility of faster pay rises and the recent strong pick-up in the world economy.

McCafferty said he could not be certain about whether to vote again for a rate rise until May’s policy meeting, but there had been no data or Brexit developments so far to make him think he was wrong in March to vote to raise rates to 0.75 percent.

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