What’s been happening? The Bank of England (BoE) has been one of the driving forces of pound movement over the past couple of weeks, and that trend continued yesterday. On this occasion a surprising shift in tone from Governor Mark Carney sent GBP exchange rates soaring. After stating just last week that the UK isn’t ready for higher borrowing costs, contrary Carney chose to use a speech at the European Central Bank (ECB) banking forum in Portugal to boost rate hike expectations. Carney commented; ‘Some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional.’ ‘The extent to which the trade-off moves in that direction will depend on the extent to which weaker consumption growth is offset by other components of demand including business investment’. His statement was enough to help Sterling rally to multi-week highs against the US dollar and Australian dollar, with the pound also jumping by around 0.7% against the euro. However, with Bank of Canada (BOC) Governor Stephen Poloz also hinting at a near-term rate hike, the pound was unable to cling to its best levels against the Canadian dollar. In political news, the government survived one of its first big tests – defeating a Labour amendment to scrap the public sector pay cap. PM Theresa May’s minority government won the vote 323 – 309, but while this was one hurdle surmounted, there are plenty more on the horizon. | 
