Article by ForexTime

Sterling’s decline was halted with the help of comments from Bank of England Governor Mark Carney, who in a speech at the Trades Union Conference in Liverpool on Tuesday, hinted at a possible rate rise in the spring of 2015.

The UK economy has staged a surprisingly strong recovery since mid-2013, bringing down unemployment sharply and raising the prospect of the Bank of England increasing borrowing costs before the U.S. Federal Reserve.

“With many of the conditions for the economy to normalize now met, the point at which interest rates also begin to normalize is getting closer,” Carney said in a speech to representatives of trade unions.

Carney said forecasts made by the Bank last month showed that if rates started to go up in spring 2015, as markets were predicting at the time, inflation would be on course to settle close to the BoE’s 2 percent target in three years’ time.

Sterling briefly jumped before falling back and British government bond prices pared some of their losses.

Although Carney said “We have no pre-set course, however; the timing will depend on the data,” most economists expect interest rates to start to rise around February.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com