Britain's pound jumped by well over a cent on Thursday to hit a one-year high against the dollar, after the Bank of England warned interest rates were likely to rise for the first time in more than a decade in the ''coming months''. David Pollard reports.
If you have one of these, you're doubly in luck. On its first day in circulation, the new £10 note is already up in value. After minutes from the Bank of England. A rate hike could, they say, come in the 'coming months'. That, driving sterling up a per cent to a one-year high against the dollar. SOUNDBITE (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "There is more hawkish rhetoric within the Bank of England than the market has chosen to accept over the last few months." Though this time round, only two of nine policymakers voted for a first rate hike in a decade. The Bank still balancing the dilemma of inflation - currently 2.9 per cent and seen topping three - against low-to-no wage growth. And a slowdown in consumer confidence - as Britain edges closer towards Brexit - though not, perhaps, towards a Brexit deal. SOUNDBITE (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "Right now it seems that with just 18 months to go before Brexit begins, there is very little time to sort out what the trading arrangements could be. And that is going to be a detrimental impact for investment and obviously for sterling too." The new notes feature Jane Austen. The classic British novelist, author of Pride and Prejudice and Sense and Sensibility. And Persuasion .... A recovery in sterling could forestall a hike, perhaps. Though markets already appear one step closer to 'conviction' over the future direction of the BoE.