Sterling hits 20-month high vs euro on Bailey's fresh rate hike signals

Sterling touched a 20-month high versus the euro on Monday after Bank of England Governor Andrew Bailey sent a fresh signal that the central bank is gearing up to raise interest rates as inflation risks mount. Sterling has gained 5.5% versus the euro this year, with analysts pointing to expectations the BoE will raise rates as a main factor supporting the pound, while the British economy struggled with a shortage of labour, an energy crisis and rising COVID-19 cases. During an online panel discussion on Sunday organised by the Group of 30 consultative group, Bailey said the BoE will "have to act" in its monetary policy meetings on the risk of medium term inflation.