Sterling rises as key Bank of England speeches loom

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company’s headquarters in Vienna, Austria, November 16, 2017. — Reuters pic
Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company’s headquarters in Vienna, Austria, November 16, 2017. — Reuters pic

LONDON, April 20 — The British pound climbed against the dollar today, gaining after four days of losses, with investor attention turning to potential policy signals from the Bank of England this week.

Sterling rose 0.2 per cent to US$1.30275, moving away from last week’s lows, not seen since November 2020.

Against the euro, the pound was 0.25 per cent lower at 83.17 pence.

Speeches tomorrow by Bank of England (BoE) policymaker Catherine Mann and Governor Andrew Bailey were seen as potentially key drivers for the pound.

After data last week showed British consumer price inflation hit at a thirty-year high of 7 per cent in March, traders are watching for indications on how the BoE views the rate outlook.

The BoE has recently softened its language on the need for more rate increases.

The International Monetary Fund (IMF) yesterday forecast slower economic growth and more persistent inflation for Britain compared with other major economies next year.

The IMF’s World Economic Outlook saw predictions for global economic growth slashed due to the impact of Russia’s war in Ukraine. =

IMF forecasts for British GDP growth this year were cut to 3.7 per cent from January’s forecast of 4.7 per cent, while for 2023 the growth rate was almost halved to 1.2 per cent from 2.3 per cent.

Meanwhile, the pound showed little immediate reaction to political developments. British Prime Minister Boris Johnson has apologised to parliament over lockdown breaches.

Lawmakers will vote on Thursday on whether Johnson should be referred to parliament’s privileges committee for an inquiry, but his majority in parliament means the motion is unlikely to pass. — Reuters