The pound’s rebound on foreign-exchange markets has been one of the most closely watched trends over the past few months. Sterling has jumped to a five-year high against a basket of major trading partners’ currencies on a trade-weighted basis (see chart).
It is at a two-and-a-half-year high of $1.64 against the US dollar, having gained more than 10% since last summer. Against the euro it has reached a 12-month high of €1.21.
The pound could now hurt growth by making exports expensive. The Bank of England worries that “any further substantial appreciation” could hamper the recovery. Clothing retailers [...]
Want to read this article now?
Already a MoneyWeek subscriber? Please log in below.
Not a subscriber? Sign-up now for a 3 week FREE trial to get instant access.