In a quiet week for data, it was comments on the potential for interest rate rises by the normally dovish Gertjan Vlieghe that moved the pound strongly upwards yesterday. As he prepares to leave the MPC this August, his comments may have been heavily caveated, but they boosted the pound nonetheless in an otherwise disappointing week for sterling.
He said that if the recovery – and loss of jobs after the furlough scheme ends – is better than expected, he would vote for a rise from 0.1% currently to 1.25% interest rate by 2024. However, he felt that a more realistic scenario were two rate rises to 0.65% by 2024.
Elsewhere, there are concerns over the scheduled unlocking of travel and other restrictions by 21 June, so the potential for a weakening pound remains today.
