THE pound has risen back above $1.50, after newly-published minutes of the latest Monetary Policy Committee meeting suggested interest rate-setters were weighing whether inflation might pick up more quickly than forecast.
Sterling hit an intra-day high of around $1.5080, its best level in about five weeks against the US currency, after publication of minutes of the Bank of England committee's April 8 and 9 meeting.
At 5pm, the pound was trading around $1.5023, up more than three-quarters of a cent on its closing level in London on Tuesday.
The pound has risen sharply against the euro in recent times. And sterling strength tends to put downward pressure on inflation.
However, signalling a view on the MPC that much of this downward impact might have fed through already, the minutes state: "It was possible that the appreciation of sterling was feeding through more quickly into the CPI (consumer prices index) than expected. That could mean less downward pressure on prices to come, and a faster pick-up in inflation when the effects of recent falls in energy and food prices dropped out of the annual comparison."
The latest official figures have put annual UK consumer prices index inflation at zero.
The minutes also show MPC members discussed continuing weakness of wages in the UK at their latest meeting.
Setting out their discussion of this issue, the minutes state: "A further pick-up in wage inflation would be necessary for labour cost growth to be consistent with meeting the target [of two per cent for annual CPI inflation] in the medium term."
All nine MPC members voted to hold UK base rates at their record low of 0.5 per cent and maintain the scale of the stimulatory quantitative easing programme at £375 billion two weeks ago.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article