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Sharp sterling decline could affect rates: BoE's Broadbent

Wednesday, October 5, 2016 - 18:46
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The Bank of England could raise interest rates is sterling fell sharply enough, but so far its moves have orderly, Bank of England deputy governor Ben Broadbent said on Wednesday.

[LONDON] The Bank of England could raise interest rates is sterling fell sharply enough, but so far its moves have orderly, Bank of England deputy governor Ben Broadbent said on Wednesday.

Sterling hit a 31-year low against the dollar on Tuesday as it extended losses following the British government's announcement that it intended to start formal talks to leave the European Union in the first three months of 2017.

Speaking at a Wall Street Journal event in London, Broadbent said sterling's decline since June's referendum had been "pretty orderly, actually" and reflected markets' longer-term judgements about Britain's economy.

"Could the currency fall far enough, hard enough, fast enough to warrant a reversal of course, and some removal of monetary accommodation? The answer is yes, in principle. That has to be judged in the context of what it does to inflation," Mr Broadbent added, noting the central bank did not target a specific level for sterling.

REUTERS