Sterling surges as Bank's chief economist backs rate rise

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Sterling surges as Bank's chief economist backs rate rise

The value of sterling against rival currencies has moved sharply higher this afternoon after it was revealed Bank of England chief economist Andy Haldane now supports a rise in UK interest rates.

At the monthly meeting of the bank’s monetary policy committee (MPS) the nine members voted, as expected, to keep rates at the present 0.5 per cent level. At previous meetings two of the nine members had supported a rate rise, but Mr Haldane’s intervention was unexpected.

In February Mr Haldane had hinted at his thought process, when he told the Treasury Select Committee that it is always better to put interest rates up to prevent inflation getting out of control, than it is to delay a rate rise out of fear for the consequences to economic growth.

Mr Haldane has spent much time in recent months visiting businesses and communities outside of London, in order to provide him with an insight into the performance of the wider economy.

In the commentary accompanying the announcement of the vote, the Bank of England said it is “more confident” that the slowdown in growth seen in the first quarter of the year was temporary.