Sterling has climbed against a basket of currencies including the dollar this morning after the Bank of England altered its forward guidance policy and revealed GDP is expected to overshoot expectations.
Delivering the latest Inflation Report, the Bank's Governor Mark Carney moved away from his previous policy to tie future interest rate rises to the unemployment rate in a widely expected move, following the sharp drop in the jobless figure.
Instead he said future rate rises will be driven by a variety of factors, adding they will remain on hold for "some time to come".
The latest Inflation Report also revealed the recovery in growth had surprised the MPC, with Carney revealing the Bank's latest GDP forecast has placed growth at 3.4% this year, rather than 2.8%.
But despite the attempt to push back rate rise expectations, the improvement in the economic outlook boosted sterling initially. The pound rose from $1.6453 against the US dollar prior to the publication of the report, to $1.6535 shortly after, a rise of over 0.5%.
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