Nevertheless, inflation remains below the central bank’s 2% target. Additionally, BOE officials have stated that they want to see unemployment decline further and average wages rise before hiking rates, the Wall Street Journal reports.
The stronger British currency can also help bolster returns for United Kingdom ETFs that do not hedge against currency risks. For instance, the iShares MSCI United Kingdom ETF’s (NYSEArca: EWU) tracks U.K. companies and is exposed to shifts in the Forex, so an expanding U.K. market coupled with a stronger pound could translate to greater U.S.-dollar returns. EWU is up 4.5% year-to-date.
CurrencyShares British Pound Sterling Trust
For more information on the cable, visit our British pound category.
Max Chen contributed to this article.