WASHINGTON (Reuters) - British finance minister Philip Hammond said on Friday that it looked like financial markets had been out of step with Bank of England Governor Mark Carney, whose comments a day earlier dampened expectations for an interest rate hike in May.
Carney roiled markets after he described recent data as "mixed" and said there could be differences of opinion among policymakers at their next meeting, putting into doubt widespread market expectations of an interest rate hike next month.
"What we can conclude from yesterday, not least because (Carney) said it himself, is that he felt it was important that he clarify to the market where their expectation should be anchored," Hammond told reporters in Washington.
"And the reaction of sterling suggests that perhaps their expectations were out of line with what the governor thought they should be."
Sterling extended its drop to a two-week low against the dollar on Friday on the back of Carney's comments.
Hammond repeated his view that he was optimistic - or "tiggerish" - about Britain's economic prospects.