Investing.com – The pound was under pressure on Tuesday after Bank of England (BoE) governor Mark Carney stated that it was not time for the British monetary authority to hike interest rates.
The BoE surprised markets last week when three out of eight members of the Monetary Policy Committee (MPC) voted to raise interest rates by 25 basis points. Consensus had only expected one dissent to the decision to hold.
“Different members of the MPC will understandably have different views about the outlook and therefore on the potential timing of any bank rate increase,” Carney explained in a speech at the Manor House breakfast in the U.K.
“From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anemic wage growth, now is not yet the time to begin that adjustment,” he clarified.
The pound hit intraday lows against major rivals on the remarks with cable losing the 1.27 level and falling as far as 1.2670 a one-week low. GBP/USD was last down 0.43% at 1.2683 by 4:24AM ET (8:24GMT).
EUR/GBP was up 0.47% at 0.8792, while GBP/JPY lost 0.36% to 141.54.
Cable has also been under pressure this week with three consecutive sessions in the red as negotiations between the U.K. and European Union (EU) on Britain’s departure from the bloc, known as Brexit, began on Monday.
Also at the Mansion House, U.K. Chancellor of the Exchequer Philip Hammond insisted that Britain would be able to achieve deals that worked for the people.
Hammond insisted that the eventual agreements needed to include a comprehensive agreement on trade and services, a mutually beneficial transitional agreement to avoid disruptions, frictionless customs arrangements that would include a period where the U.K. follows customs rules already in place until new ones can be implemented.
Hammond also warned against the removal of EU derivatives trading from London.
"Fragmentation of financial services would result in poorer quality, higher priced products for everyone concerned," he insisted.