Azernews.Az

By Bloomberg

The pound climbed to a seven-month high against the dollar as an unexpected increase in U.K. retail sales added to this week’s gains after Bank of England policy maker Kristin Forbes said inflation may rebound sharply.

Sterling advanced for a fifth day after a report on Thursday showed sales excluding auto fuel increased 0.2 percent in May from the previous month. Analysts surveyed by Bloomberg had predicted a 0.2 percent decline.

Data on Wednesday showed the fastest increase in Britons’ wage growth since 2011. That, coupled with the BOE saying factors holding back the economy were fading, had traders bringing forward their calls for when the central bank would increase interest rates.

“The wage data from yesterday kicked off sterling strength, and the Forbes comments boosted the hawkish argument for the BOE,” said Stuart Bennett, head of Group-of-10 currency strategy at Banco Santander SA in London.

The pound rose 0.5 percent to $1.5905 at 9:37 a.m. London time, after touching $1.5929, its highest since November. Sterling was little changed at 71.71 pence per euro. It reached 71.46 pence on Wednesday, the strongest level since June 1.

Benchmark 10-year government bond yields fell nine basis points, or 0.09 percentage point, to 1.97 percent. The 5 percent gilt due in March 2025 rose 0.89, or 8.90 pounds per 1,000-pound face amount, to 126.65.