Pound soars as Carney hints at interest rate rise

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become necessary”, but would depend on whether a drop in household spending is countered by more companies ploughing money back into their businesses.

His comments at the European Central Bank (ECB) Forum were hawkish in contrast to his Mansion House speech last week when he said “now is not yet the time to begin that adjustment”.

Shares in pharmaceuticals firm and drinks giant

were off 114p to 4,406p and 19.5p to 2,311.5p respectively.

Some blue-chip firms, which report in US dollars or euros, can struggle on the FTSE 100 Index when the pound rises because their earnings suffer from a less favourable currency translation.

Neil Wilson, analyst at ETX Capital, said: “Sterling leapt above $1.29 to its strongest in three weeks after a surprising intervention from Bank of England governor Mark Carney, while continued dollar softness offered further support.

“Seeking to clarify remarks made lately, Mr Carney said he would back a rate hike if business investment and wages started to improve.

“Coming off the back of the 5-3 split at the last meeting and hawkish comments from the Bank’s chief economist, Andy Haldane, it’s the clearest signal yet that the Bank is minded to tighten. There is a sense the MPC may wish to ‘correct’ its rate cut last summer in light of a surprisingly resilient UK economy and rising inflation, which is accelerating quicker than the Bank expected.”

Across Europe, Germany’s Dax was 0.2 per cent lower and the Cac 40 in France slipped by 0.1 per cent. The price of oil was 0.9 per cent higher at $47.05 a barrel after American crude production eased back.

In UK stocks, outsourcing firm lifted one per cent after it said revenues would rise thanks to a boost from new business in the US.

On the second tier,

slipped back despite batting away fears of a consumer spending slowdown.

The biggest risers on the FTSE 100 Index were

up 23.5p to 630p, up 29p to 1,360p, up 5.6p to 294.1p,

up 13.5p to 788p. The biggest fallers on the FTSE 100 Index were down 61p to 1,705p,

114p to 4,406p, down 38p to 1,478p,

down

31p to 1,306p.

down WALL Street rallied sharply yesterday, with the S&P 500 scoring its biggest one-day percentage gain in about two months, as financial and tech stocks led a broad market rebound.

The Nasdaq posted its best session since November 7, the day before the US presidential election.

The benchmark S&P had suffered its biggest one-day drop in about six weeks on Tuesday after a healthcare bill was delayed in the US Senate.

The healthcare legislation is the first major plank of President Trump’s domestic policy agenda, with investors eager for him to move onto his other plans including tax cuts, infrastructure spending deregulation.

Bank stocks including

and helped boost the S&P 500, both rising more than 2 per cent.

The interest rate-sensitive group was helped by an increase in yields for 10-year Treasuries and by a widening spread between shorter and longerdated US bonds.

In earnings news,

shares rose 1.6 per cent after the Cheerios cereal maker reported a better-than-expected quarterly profit.

shares rose 8.4 per cent. The company will announce its sale to private equity firm a person familiar with the matter said on condition of anonymity.

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