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Expected interest rates raise sends pound to five-year high

English.news.cn   2014-06-17 10:44:30

LONDON, June 16 (Xinhua) -- The British pound Monday traded above 1.70 against U.S. dollars for the first time since August 2009 after Charlie Bean, deputy governor of Bank of England (BoE), said an increase in interest rates would be a sign the economy was returning to normal.

It being the second time a senior official from the British central bank made hawkish comments on interest rates, markets bet on a rate hike taking place this year or in the first quarter of 2015.

Bean, who will retire on June 30, said in an interview with The Sunday Times that an increase in interest rates will be a symbolic step, because it will be an indication that "we are on the road back to normality."

"I would welcome us getting on to the path of normalization, as a demonstration that the economy is healing," he said.

Last week, however, BoE governor Mark Carney said in a speech that borrowing costs may rise sooner than economists expect.

The sterling remained at 97.86 pence or 0.9786 pounds per euro at 15:00 GMT Monday. Earlier, it touched 79.59 pence per euro, the strongest level since Oct. 1, 2012.

The pound was at 1.6987 against dollar at 15:00 GMT after climbing to 1.7011, the highest since Aug. 6, 2009.

The pound strengthened 9.3 percent in the past year, the best performer among ten developed-nation currencies, according to data compiled by Bloomberg.

The minutes of BoE's Monetary Policy Committee meeting on June 4-5 will be released on June 18.

Editor: An
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