The pound rose, the Bank of England worried about inflation

(London) Sterling rose against the euro on Monday as the Bank of England signaled its concern about rising inflation, as the European Central Bank remains very cautious on the matter.


Around noon and 10:00 EST, the British pound rose 0.46% against the European single currency, reaching 84.93 pence per euro.

The row between Europe’s two largest central banks surfaced on Monday during the interventions of their leaders in their parliaments.

European Central Bank President Christine Lagarde reiterated to the European Parliament that inflation, which reached 4.1% in one year in September, will not continue, and she considered an interest rate increase “highly unlikely” in 2022.

Across the channel, Andrew Bailey, governor of the Bank of England, admitted that inflation, which reached 3.1% in one year in September in the UK, had made him “extremely uncomfortable”, and he did not rule out a rate hike as early as December. .

“Investors are questioning how much time the BoE will have before the ECB moves,” said Joshua Mahoney, an analyst at IG.

“UK markets will be waiting to see how UK employment will react to the end of government aid this week,” commented Danny Hewson, analyst at AJ Bell.

Mr. Bailey no longer promised to take action as early as December, preferring to wait until he had employment data for September and October before making his decision.

Investors are not immune to surprise: the Bank of England toppled the British pound at its last meeting by keeping its monetary policy unchanged, even though it had already expressed its dissatisfaction with rising inflation.

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