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THE POUND made gains against the euro yesterday, rising to 1.17 after a Bank of England policymaker suggested the UK might need an interest rate hike sooner rather than later.After an initial slump at the beginning of trading on Tuesday 7 February, due to Labour amendments to Article 50 being blocked, the pound strengthened against the euro later in the day.

The pound to euro exchange rate soared from 1.157 to 1.171 yesterday, and has now risen to 1.174.

This increase came in the wake of Bank of England policymaker Kristen Forbes stating that the UK might need an interest hike sooner rather than later due to recent strong economic data.

Another reason for the shift has been the weakening of the euro over Greek debt fears.There have been signs that the gap between the EU and the International Monetary Fund (IMF) is getting worse.

The IMF has claimed that the current Greek debt burden is unsustainable.

Jeroen Dijsselbloem, President of the Eurogroup, has disputed these claims.

He said that the IMF’s predictions are “surprising because Greece is already doing better than that report describes.”The pound to euro rate is likely to remain volatile in light of the political situation – Parliament continues to debate on the article 50 bill, which will take us out of the EU, today.

This comes after Express.co.uk reported that pound sterling made losses against the US dollar on Tuesday 7 February.

The pound to dollar exchange rate reached highs of 1.249 on 6 February, but yesterday dropped to lows of 1.235.

This dip came amid Parliament’s debate over Brexit.

Source: The Express

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