The pound strengthened against the euro and the dollar over the course of yesterday and has broken key levels this morning.
The pound was boosted following ‘hawkish’ signals from the Bank of England. Officials indicated that interest rates could be increased soon.
However, speaking yesterday, Bank of England official, Silvana Tenreyo presented a countering view, arguing that raising interest rates would be “self-defeating”. She believes that current inflationary pressures are temporary. Her comments did not appear to worry markets and sterling was unaffected.
The developments surrounding the Northern Ireland protocol are also supporting the pound at the moment. Brexit Minister Lord Frost will meet with his European Union (EU) counterpart Maros Šefčovič today to discuss this topic further. Markets will be watching closely for any further developments.
