BoE labelled ‘unreliable boyfriend' as Carney cools rate rise talk

Sterling has fallen back below $1.70 after Bank of England Governor Mark Carney sounded a more dovish tone on base rate rises.

Speaking to the Treasury Select Committee this morning, 12 days after saying the base rate could rise "sooner than markets currently expect", Carney said stronger growth may well be offset by the fact there remains spare capacity in the UK economy. That sent sterling down from $1.702 to $1.697, the pound having risen above $1.70 earlier this month as markets began pricing in a 2014 rate hike following Carney's Mansion House speech. Carney said this morning that recent wage data suggests spare capacity remains a difficult hurdle for the economy to overcome. "Taken in isolation the c...