Pound’s No 1 fan sees rate rise

Sterling traders are making a costly mistake to assume a doveish Federal Reserve will prompt the Bank of England to delay raising interest rates, according to the biggest sterling bull.

UniCredit predicts Britain’s currency will strengthen 6% to $1.65 by the end of the first quarter of next year, making it the most optimistic forecaster in data compiled by Bloomberg, which has a consensus view for a slight decline.

Italy’s largest lender says the Fed will increase rates in December, with the Bank of England following two months later. That’s a contrast to the futures market, where traders aren’t anticipating a BoE lift-off until late 2016 after the Fed stood pat on monetary policy last week. Higher interest rates tend to boost currencies.