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Sterling hits 11 year high

Pound climbed to its highest levels against the dollar since mid-September today, as data showing UK manufacturing growth recovered from a seven-month low in July eased concerns about an economic slowdown.

This morning’s Purchasing Managers’ Index (PMI) survey climbed to 55.1, exceeding the 54.4 consensus in a Reuters poll of economists, helped by the biggest influx of new export orders since 2010.

The numbers should hearten policymakers at the Bank of England, which will make a policy decision and release its latest quarterly Inflation Report on Thursday, and should soothe investors’ fears that economic growth is deteriorating rapidly after a sluggish start to the year.

Only two out of 80 economists polled think the BoE will raise its main interest rate on Thursday from a record-low 0.25 percent

A run of weak data has – along with deep uncertainty about the impact of Brexit on the economy – cooled speculation that the BoE is poised to start removing its crisis-level stimulus, which followed a series of hawkish remarks by policymakers at the banks in recent months.

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