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Sharp sterling decline could affect rates - BoE's Broadbent
October 5, 2016 / 9:59 AM / a year ago

Sharp sterling decline could affect rates - BoE's Broadbent

LONDON (Reuters) - 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.

A British ten pound banknote is seen in a photo illustration taken March 16, 2016. REUTERS/Phil Noble/Illustration/File Photo

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,” Broadbent added, noting the central bank did not target a specific level for sterling.

Reporting by David Milliken and Peter Hobson, writing by Andy Bruce

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