* Graphic: World FX Rates in 2020 tmsnrt.rs/2egbfVh
*Graphic: trade-weighted sterling since the Brexit vote tmsnrt.rs/2hwV9Hv (Adds quote, updates title and rates)
LONDON, Oct 11 (Businesshala) – The Bank of England said inflation levels in Britain were concerning and that sterling rose against both the euro and the dollar after Britons prepared for a hike in interest rates ahead of Britons in interviews published over the weekend. Gaya.
Bank of England policy maker Michael Saunders said households should be prepared for interest rate hikes “quite early”. The Telegraph newspaper said on Saturday that it said investors were right to bet on a sharp rise in borrowing costs, with consumer price inflation above 4%.
The bank’s governor, Andrew Bailey, said in an interview to The Yorkshire Post newspaper that inflation running above the BOE’s target of 2.0% was “very worrying” and had to be managed to prevent it from becoming permanently embedded.
Interest rate futures traded on the CME showed that November contracts were priced at a 20% chance of a rate hike next month compared to 12% last week, while December futures were pricing in a 45% chance of a rate hike by then. Was.
“Sterling traders have spent the morning on Monday in remarks from BoE officials over the weekend,” said Simon Harvey, senior forex market analyst at Monex Europe.
“We see the pound’s gains here as limited due to concerns over the underlying level of economic activity.”
Sterling rose 0.1% versus the dollar to $1.3635 at 0823 GMT, after touching a two-week high. Against the euro, it rose 0.2% to 84.79 pence, not far from a two-month high in early morning trading.
The 2-year gilt yield hit 0.603% shortly after the market opened, the highest since January 2020, up 7 basis points on the day.