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Pound drops on Carney rate comments

The pound fell after the Bank of England governor said he did not think that now was the time for interest rates to rise.

Mark Carney’s comments came in his Mansion House speech, and sterling fell 0.4% to $1.2684 in response.

Last week, the Bank of England held interest rates at 0.25%, but three of the eight Bank policymakers voted for a rate rise.

However, Mr Carney said he thought a rate rise now would be premature.

He said uncertainty over the direction of the economy and “anaemic” wage growth meant that “now is not yet the time to begin” increasing rates.

The pound also fell against the euro, dropping 0.5% to 1.1374 euros.

On the stock market, the FTSE 100 index was up 22.84 points at 7,546.65 in early morning trade.

Shares in plumbing services firm Wolseley fell 1.7% despite the company reporting an increase in third-quarter profits.

The firm – which owns Plumb Center – reported a 9.5% rise in trading profits to £254m in the three months to 30 April. However, investors sent the shares lower on worries over shrinking profit margins at its US business.

Source: business

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