Sterling nears five-year high after Carney surprises on rates

Housebuilder stocks have fallen and the pound is nearing 1.70 against the dollar as investors react to Mark Carney's change of tack on interest rates and new measures that may curb mortgage borrowing.

In comments made in the annual Mansion House speech yesterday evening, Carney took a more hawkish tone on interest rates for the first time since becoming Bank of England governor last summer. "There's already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced," Carney said last night. "It could happen sooner than markets expect." Sterling rose to 1.6980 against the dollar this morning in response, a rise of 1%. The currency also hit a 19-month high against the euro following the comments, which make a late-2014 rate hike mor...