Governor’s comments in the YP spark a frenzy in the markets

THE pound spiked sharply against the dollar yesterday after Bank of England Governor Mark Carney told the Yorkshire Post that he saw no need for more bond-buying given the signs of an economic recovery.

Mark Carney, Governor of the Bank of England, in Leeds.

The story triggered a frenzy of activity in the foreign exchange markets as traders scrambled to take stock of the central banker’s comments.

Sterling hit a high of $1.6133, while the euro sank to £0.8363, following publication at 6am.

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An analyst at one foreign exchange company said: “Many traders will have been burnt by the rapid move. The fact that the prices have returned to pre-Carney/YP posting levels will be of little comfort to them.”

Mr Carney made the comments in an interview during a visit to Leeds on Thursday.

He responded to a question about whether the Bank of England would extend its asset purchase programme.

He told the Yorkshire Post: “My personal view is, given the recovery has strengthened and broadened, I don’t see a case for quantitative easing and I have not supported it.”

The remarks were seized on by commentators around the world.

“The overall assumption among market players is that Carney is a dove, and so there is a gap between that and this kind of comment,” said Daisuke Karakama, economist for Mizuho Bank in Tokyo.

An analyst told the BBC that the markets are still getting used to Mr Carney.

The Wall Street Journal said: “In a QE-focused world where central bankers’ announcements can move markets dramatically, how Mr Carney manages the message – and how it gets fed back to markets – perhaps bears a little more thought – and a really good grasp of the regional newspapers.”