Sterling slips as BoE's Carney says any rate hikes to be gradual, limited

LONDON: Britain's pound fell over half a percent on Monday after the Bank of England's governor Mark Carney said that any rise in UK interest rates in the coming months would be limited and gradual.

"The case for a modest monetary tightening is reinforced by the possibility that global r* (equilibrium interest rates) may be rising, meaning that monetary policy has to move in order to stand still," Carney said at the International Monetary Fund's headquarters in Washington.

He went on to say though that "any prospective increases in Bank Rate would be expected to be at a gradual pace and to a limited extent."

Already down 0.3 percent on the day, sterling lost half a cent to hit the day's low of $1.3503, down 0.6 percent after Carney's comments.

It also fell 0.6 percent against the euro to trade as soft as 88.55 pence per euro. Britain's FTSE 100 rose slightly to trade up 0.4 percent after the drop in the pound.