Hawkish remarks from Carney send pound surging

|By:, SA News Editor

In his first big public appearance since becoming Bank of England governor, Mark Carney is a bit more hawkish than some may have hoped for, saying he sees signs the economic recovery is broad-based and set to continue, and the bank won't hesitate to hike rates when required.

On the dovish side, he says the bank won't consider hiking rates until 7% unemployment is hit and even that level isn't necessarily a trigger. There's also nothing about the bank's forward guidance which would prevent adding to stimulus if the bank deemed it necessary.

Cable (FXB, GBB) shoots higher, continuing a big run which began when Carney took the BOE helm earlier this summer. It's erased nearly all of a sizable early loss this session, and is buying $1.5530 vs. about $1.49 when Carney took over.

Bulls on the pound should remember that Ben Bernanke took over the Fed flashing his hawkish guns as well - hiking rates numerous times into clear signs the economy/housing was rolling over. Central bankers take it as sort of a code to start off tough on monetary policy.

The FTSE 100 (EWU) loses a bit more ground on the session, -0.6%.

Other U.K. equity ETFs: FKU, EWUS, DXPS.