Pound hits 26-year high as dollar plummets

Sterling leapt to $2.05 fuelled by renewed expectations of higher UK interest rates after stronger than expected inflation data emerged yesterday. It has reinforced predictions the Bank of England would increase interest rates to 6% as early as next month, and came as the Bank prepared to release the minutes of the latest meeting held by its rate-setting Monetary Policy Committee. The euro also benefited from renewed weakness in the dollar, rising as high as $1.3823 on EBS, the electronic currency trading platform. Ian Kernohan, economist at RLAM, says he expects the economy to slow ...