Sterling was steady against the dollar this morning amid speculation that the Bank of England could cut interest rates sooner than previously expected.

The pound was at $1.7349 a short time ago having barely moved since its
$1.7347 showing during early trading this morning.

Yesterday, disappointing retail sales prompted analysts to suggest that the monetary policy committee could cut the cost of borrowing.

The base rate has remained at its current level of 4.5 per cent since August of last year, as sluggish house price growth combined with inflationary pressures such as rising oil prices to encourage a period of stability.

Meanwhile, in the US, Federal Reserve chairman Ben Bernanke told congressmen on the financial services committee that further interest rate increases might be necessary.

The Fed has been steadily increasing the cost of borrowing to battle inflationary pressures and Mr Bernanke hinted last night that the policy could remain in place.