Pound rises to its highest level since the Brexit referendum
Pound reaches highest level against a basket of currencies since the Brexit referendum a decade ago
Pound climbs to its highest level since the Brexit referendum
The pound has reached its strongest overall level since the Brexit referendum more than a decade ago.
Sterling has gained sharply in recent weeks against both the euro and the dollar, ahead of an anticipated increase in interest rates.
According to Bank of England figures, the most closely watched gauge of the British currency’s value against a basket of 18 major world currencies this week hit its joint highest point since the June 2016 referendum.
The reading stood at 86.4 on an index where 100 represents the value in 2005. The Bank is due to formally confirm the figure on Thursday.
Sterling dropped sharply after the Brexit referendum in June 2016, and later fell to even lower levels during the Brexit process, the Covid pandemic and the 2022 mini-Budget.
Some traders said the UK was now being viewed differently because of relative political stability, strong growth and the thawing of relations with the European Union.
In recent years, sterling has moved strongly in response to Brexit developments and political uncertainty.
Jim O'Neill, an economist and former Treasury minister, said: "I'm not surprised. People were, and to a lesser extent, are, underestimating the improving momentum in the UK,"
A stronger pound can help curb inflation and boost consumers’ purchasing power for imports and holidays.
UK growth so far this year has exceeded all expectations, but there are signs that higher energy and fuel prices have now affected consumer confidence.
The Bank's nine-member Monetary Policy Committee faces a key interest rate decision on Thursday, with the first rise in three years widely anticipated.