Sterling Rising Ahead of Interest Rate Announcement of the BoE

During morning trading, the sterling has been creeping up ahead of the announcement of the most recent decision of the Bank of England on whether to increase the interest rates.

Even though the monetary policy committee (MPC) of the Bank is widely anticipated to maintain interest rates at 0.5 percent, some analysts are predicting that the tone of the policymakers will be hawkish and may establish the stage for a rate increase this coming May.

The announcement drove sterling up as high as $1.418 during early trading. However, the pound had slightly settled at around 10 in the morning to hover up by approximately 0.06 percent against the US dollar. Sterling was also up by around 0.1 percent against the euro.

MUFG, an investment bank, even went so far as to disclose that the Bank of England could increase interest rates today – despite worries over marginal wage growth and lacklustre inflation rates.

The currencies analyst of the bank, Lee Hardman, said that there seems to be an “outside chance that a hike could be delivered as soon as today,” even though a 65-strong survey from Reuters all concluded that this would definitely not be the case.

Hardman said that the indications of a rising inflation and tightening labour market, and the easing of the austerity measures of the government, could be the developments that the Bank requires.