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British pound rises to seven-year high against euro

Xinhua, March 11, 2015 Adjust font size:

The British pound Tuesday hit 1.40 pounds against 1 euro mark for the first time since December 2007, as the European Central Bank (ECB) began its quantitative easing policy on Monday.

Pound traded at 1.4024 against euro here at 1500 GMT, compared to the exchange rate at around 1.20 pounds against 1 euro 12 months ago.

Since mid-January, the speculation on ECB's quantitative easing policy and the afterward confirmation from the authority has substantially pushed up the exchange rate of pound against euro.

The ECB will buy 60 billion euros (64.3 billion U.S. dollars) of government and private bonds monthly for at least 18 months in a bid to ward off deflation.

In contrast, Mark Carney, the governor of the Bank of England (BoE), reckons that the low-inflation environment in Britain is "temporary".

The central bank expects that British consumer price inflation would rebound to the target of 2 percent from the current 0.3 percent within two years, heating the market expectation that BoE would raise interest rates in early 2016. Endit