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Sterling Update

Sterling rose against the dollar today, investors still weighing the likelihood of an interest rate rise from the Bank of England after labour market data this week offset some worries over Britain’s exit from the European Union.

The pound has recovered from its losses after Britain’s election in June as a number of BoE policymakers have spoken out in favour of reversing a rate cut delivered in the wake of the Brexit vote last year.

Investors are split over the Bank’s stance on rates, but say arguments for a hike are increasing given economic data has held steady in the face of inflation that is nearly 1 percent over the Bank’s 2 percent target.

Ratings agency Moody’s said this week that Britain’s creditworthiness was under pressure following the Brexit vote, and the ongoing uncertainty over the outcome of two years of negotiations Britain will have with Brussels.

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