Bank of England Governor Mark Carney said late Thursday U.K. interest rates could rise sooner than investors expect – a surprisingly strong comment that sent sterling soaring.
"There's already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced," Carney said at the annual Mansion House speech. "It could happen sooner than markets currently expect."
Carney said BoE officials will closely watch the labor market to determine the right time to hike rates and will tighten policy slowly when they do begin to take action.
The British pound, also known as sterling, jumped over a cent in New York trade and extended those gains into Friday's Asian session to $1.6959 – its highest level in over a month. (Track currencies here)
"It's a very interesting comment from Carney to push through a more hawkish view and it actually came after the Chancellor announced the BoE would be able to use some more macro prudential measures to take away some of the housing market froth," HSBC Currency Strategist Dominic Bunning told CNBC.