The pound climbed from near a four-month low versus the dollar after Bank of England Governor Mark Carney said an expectation of a recovery in wages may prompt policy makers to increase interest rates.
Sterling strengthened for the first time in four days against the euro after Carney said in a Sunday Times interview policy makers “don’t have to wait for the fact” to increase its benchmark rate from a record-low 0.5 percent, where it has been since March 2009. Investors may gain a clearer picture from the minutes of the Monetary Policy Committee’s last meeting, due to be published on Aug. 20. U.K. government bonds fell, pushing 10-year yields up from close to a 12-month low.
“Carney’s comments that the BOE would consider raising rates before real wages are growing sustainably and that there are a wide range of views on the MPC have been interpreted less dovishly,” said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “Recent pound weakness may prove only temporary, especially versus the euro.”
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