File Photo: mypivots.com
London, UK (BBN)- The Great Britain Pound (GBP) has hit its highest level against the US dollar since the Brexit vote after a senior Bank of England official fuelled speculation it could raise rates in the coming months.
Gertjan Vlieghe, who has previously argued against a rate rise, said the "moment is approaching" when interest rates might need to go up, BBC reported.
The Bank kept rates at 0.25 per cent this week, but hinted at a rise in the future.
Sterling rose more than 1.0 per cent against the dollar to hit $1.3610.
That was its highest level since 24 June, the day after the Brexit vote.
The GBP, also known as pound gained more than 1.0 per cent against the euro to rise above 1.13 euros.
Analysts have suggested the Bank could lift interest rates back to 0.5 per cent, the level they were before the EU referendum, as soon as November.
In a speech on Friday, Mr Vlieghe said: "Until recently, I thought the appropriate response of monetary policy was to be patient, given modest growth and subdued underlying inflationary pressure.
"But the evolution of the data is increasingly suggesting that we are approaching the moment when Bank Rate may need to rise."
Mr Vlieghe, who was the first Bank member to vote for a rate cut after the Brexit vote, said there was now growing evidence the UK economy was picking up.
'Concerted effort'
He pointed to unemployment falling to record lows, as well as signs that households are spending more and that wages are rising in the private sector.
"If these data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, the appropriate time for a rise in Bank Rate might be as early as in the coming months," Mr Vlieghe said.
The Bank said on Thursday that higher inflation and a pick up in growth could lead to a rate rise soon.
That helped the pound gain against other currencies - a move which continued on Friday - because higher interest rates would make sterling more attractive to investors.
Howard Archer, chief economic adviser to the EY Item Club, said: "Vlieghe's comments will support belief that the Bank of England could well raise interest rates before the end of 2017 with a move as soon as November very much in play.
"Admittedly, the Bank of England has previously talked up the likelihood of an interest rate hike then failed to follow through, but there does seem to be a more concerted effort this time around and more unanimity within the MPC of the case for a hike."
BBN/SSR/AD