Sterling on course for two-dollar exchange
Sterling gains that have driven it to near a two-year high against the dollar will be maintained for the immediate future, analysts have said.
In early foreign exchange trading on Monday, the pound rose 0.6 per cent to $1.9435, having increased 12.54 per cent through the year and is on course for $2 by year end.
A combination of UK interest-rate speculation and weak US economic indicators have driven the growth, alongside dollar sales after China said it would cut dollar reserves.
"The fuel on the fire for the pound has been the dollar's done very badly recently," Luke Waddington of Royal Bank of Scotland told Bloomberg.
"You're getting high yields in the UK and you can't rule out the Bank of England won't raise rates once or twice, given the numbers are coming in looking good."
A Bank of England report earlier this month said inflation would "rise further above the target in the near term, but then fall back as energy and import price inflation abate".