Pound rises to its highest level since the Brexit referendum

The pound was up 0.13% against the dollar at $1.3495 and 0.16% lower against the euro at €1.1979 as of 04:15 GMT on Thursday, marking its strongest level since the June 2016 Brexit referendum.

Sterling had lost much of its value after the referendum and fell to further lows during the Brexit negotiations, the Covid pandemic and the 2022 mini‑Budget, and it has reacted sharply to Brexit‑related developments and political uncertainty in recent years.

Some traders said the United Kingdom is now being viewed more positively because of relative political stability, solid growth and a rapprochement with the European Union. 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 firmer pound can help curb inflation and boost consumers' purchasing power on imported goods and holidays. UK growth so far this year has exceeded all forecasts, although higher energy and fuel prices are beginning to dent consumer confidence. The Bank of England's nine‑member Monetary Policy Committee is set to decide on interest rates on Thursday, with the first rise in three years widely expected.