Pound rallies against the greenback after the Governor's backing
Saturday 16 March 2013
The beleaguered pound broke a lengthy losing streak against the dollar yesterday as Sir Mervyn King's show of support sent traders scurrying back into sterling.
The pound, which hit 33-month lows against the dollar this week, rose as high as $1.5177 yesterday after the Governor of the Bank of England's comments that the currency was now "properly valued".
Sterling has fallen some 9 per cent this year as a recovering United States economy, relative eurozone calm and swelling support for more money printing on the Bank's Monetary Policy Committee prompts doubts over the pound among investors.
The Governor, who said rate-setters "were certainly not trying to push sterling down", is one of three members who urged more quantitative easing last month.
The pound was also helped against the dollar by benign US inflation figures for February. Despite rising fuel prices, analysts said the figures offered no bar against the US Federal Reserve continuing its quantitative easing programme to support the economy.
The Bank of England's chief economist Spencer Dale meanwhile helped the currency by railing against "dangerous talk" that higher inflation "may even aid the recovery". In a veiled warning against dramatic changes to the central bank's inflation targeting mandate, he said there were worrying signs of cracks in the "hard-won consensus – that low and stable inflation was a prerequisite for economic prosperity".
Sir Mervyn also last night rejected the idea that a "major change" to the Bank of England's remit was necessary, despite indications that the Chancellor is looking at an overhaul in order to promote growth.
Speaking to ITV News, the Governor suggested that the present system was already sufficiently flexible. "What's most important is that we commit ourselves again to a very clear target for inflation of 2 per cent" he said. "Of course, what we've seen through the financial crisis is there are difficult judgements to be made about the short run trade-offs between inflation and growth and I think it's perfectly reasonable to ask questions about how those judgements are made."
Emergency call 'started off dumb, but got pretty serious'
Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'
Thought you'd seen it all after the Jeremy Paxman interview?
Greatest mystery about the hit BBC1 show is how it continues to be made at all, writes Grace Dent
"History is violent," says the US Army tank commander Don "Wardaddy" Collier
Striker's four-month ban for biting an opponent expires on Friday
- 1 This 'woman calls police to order pizza' story isn't going where you're expecting
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
- 4 Ottawa shootings: Bruce MacKinnon's cartoon is the perfect tribute to soldier Nathan Cirillo
- 5 Of course, teenage girls need role models – but not like beauty vlogger Zoella
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
This 'woman calls police to order pizza' story isn't going where you're expecting
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Diwali: What is the festival of lights – and how is it celebrated around the world?
Jimmy Carr's controversial Oscar Pistorius joke goes a bit too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
iJobs Money & Business
£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
£100 - 125k: Guru Careers: A CTO / Chief Technology Officer is needed to join ...