LONDON, April 14 — The British pound rose for a second consecutive day today as the dollar weakened broadly and expectations grew that rocketing inflation would force the central bank to tighten policy aggressively in the coming months.
Against the dollar, the pound edged 0.1 per cent higher to US$1.3180 (RM5.57), its highest level since April 5. Versus the euro, the British currency was broadly steady around 83.08 pence.
Yesterday’s data showed British consumer price inflation jumping in March to 7 per cent, its highest level in three decades and more than expected by most economists in a Reuters poll.
Financial markets are all but certain the Bank of England will raise interest rates to 1 per cent from 0.75 per cent on May 5 before taking them to 2 per cent-2.25 per cent by the end of 2022, though many economists expect it to be less aggressive.
While British bond yields softened slightly, two-year yields remained near their highest levels since March 2009, hit earlier this week, further boosting sentiment. — Reuters
