Bank of England talking up sterling to fight inflation: S&P
[LONDON] Ratings agency Standard & Poor's said it was "a bit sceptical" that Britain's economy needed an interest rate increase soon and comments from the Bank of England that a hike might be nearing seemed designed to push up sterling and cool inflation.
"Overall, we believe the Bank and Mark Carney's recent statements are primarily aimed at propping up sterling to reduce imported inflation pressures," S&P analysts said in a report.
"This strategy may include an actual 25 basis point hike in November, thus bringing the policy rate back to where it was before the Brexit referendum. Additional moves in 2018 do not appear warranted on the back of a slowing economy," it said.
S&P also said it saw signs of a slowdown in investment by companies in Britain as a result of uncertainties over Brexit.
REUTERS
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