GBP Rallies on Hawkish Bank of England Economist, But Bounce May Be Short-Lived

The British Pound (GBP) experienced a modest rebound on Thursday, rising by roughly a third of a percent to trade near 1.3530 against the US Dollar.

This move came after the Bank of England's chief economist argued that interest rates should be increased from 3.75% to 4%, citing concerns about inflation and the wait-and-see stance of the majority.

The argument was made in a speech delivered at 15:00 GMT, and although it did not sway the majority, it still had an impact on the market, with GBP/USD jumping from the 1.3500 area to its session high within the hour.

However, experts caution that this bounce is merely a relief rally, and that a daily close above 1.3550 would be needed to confirm a trend change.