Pound Gains Versus Dollar And Euro After Sentance Says Rates Should Rise

By Garth Theunissen - Feb 17, 2011 5:42 PM GMT+0800

The pound strengthend against the dollar and euro after Bank of England policy maker Andrew Sentance said the bank should raise interest rates to boost the British currency as a means of curbing inflationary pressures.

Sterling appreciated 0.2 percent to $1.6127 by 9:36 a.m. in London. Against the euro, the pound added 0.1 percent to 84.23 pence.

“One of the benefits which we might see from a policy of raising interest rates is a modest appreciation of sterling, which would mitigate the impact of global inflationary pressures in the short term and help to steer inflation back to target over the medium term,” Sentance said in a speech in London today. Policy makers can’t be “relaxed” about the level of the pound, he said.

To contact the editor responsible for this story: Garth Theunissen at gtheunissen@bloomberg.net