ET:Sterling hits one-year high vs euro after unemployment data
LONDON: Sterling rose on Wednesday after a sharp drop in the UK unemployment rate, raising expectations that an interest rate rise will be brought forward.
The euro fell to a one-year low versus sterling of 81.81 pence in the wake of the news, from 82.26 pence beforehand. The pound jumped to $1.6548, its highest level in almost three weeks, from $1.6464 before the minutes.
The Bank of England said in minutes from its latest rate-setting meeting that unemployment would hit its 7 per cent threshold, at which it will start to consider rate rises, "materially earlier" than forecast in November.
However, the Bank added that it saw "no immediate need" to raise rates.
UK money markets are edging towards pricing in the chance of an interest rate rise in 11 months' time, compared with in a year's time on Tuesday.
