Sterling hit a two-week high on Tuesday after a top policymaker said the Bank of England should not delay in raising interest rates after a recent strong pick-up in the world economy.
Ian McCafferty, one of the two members of the nine-strong Monetary Policy Committee who voted for a rate rise last month, told Reuters in an interview that wage growth might prove stronger than most of his colleagues thought, adding to pressure that inflation is running about the BoE’s target.
Sterling edged higher after his comments and hit a day’s high of $1.4170 against a broadly sturdy dollar. Against the euro, it strengthened to 87.08 pence
The BoE raised rates for the first time in more than a decade in November and a recent string of strong data including house price data on Monday have virtually sealed the case for a second rate increase in May.