Pound climbs towards multi-year high against dollar
Sterling has risen 12 per cent against the dollar so far this year on bullish sentiment on UK economy
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The pound scored its biggest gain for more than seven months this week as official figures showed the construction industry ended the year on a more positive footing than previously thought.
Sterling has risen by 1.9 per cent this week, hitting $1.6708 after the construction data was released.
The surge in the pound has been driven by speculation that interest rates in the UK could rise sooner than expected after Bank of England Governor Mark Carney was forced to redraw his forward guidance policy this week, replacing the simple target of unemployment falling below 7 per cent before rates could rise with a matrix of economic indicators including spare capacity.
Harry Adams, managing director of currency specialist Argentex, said: “This time last year the majority of economists dismissed any chance of an interest rate rise in 2014; 12 months on and the odds of a hike have vastly shortened. This shift in sentiment, coupled with the ever-improving economic data, has encouraged global investors to buy the pound with increased vigour.”
The pound has risen 12 per cent against the dollar so far this year, making it the strongest performer among developed market currencies. While the US is slowing its stimulus programme, it is still pumping $65 billion a month into the economy.
Construction output rose 2 per cent in December, prompting an adjustment of the figures used in the final-quarter GDP estimates from 0.3 per cent down to 0.2 per cent up.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments