Pound hits $1.14 as rally continues

Sterling is continuing to rally, and has now hit $1.142 for the first time in two weeks.

That’s a gain of around a cent this morning, taking the pound back to levels a few days before the mini-budget.

Yesterday’s decision not to scrap the 45p tax rate, the bringing forward of Kwasi Kwarteng’s medium-term plan for the public finances, and the Bank of England’s emergency intervention in the bond market last week are all calming nerves.

The dollar is also weaker generally, which is helping other currencies climb back off the mat.

Matt Britzman, Equity Analyst at Hargreaves Lansdown, said: “Sterling strengthened on Monday as the UK government agreed to abandon the plan to axe the top rate of tax.

“However, this mini reversal is likely to be short-lived in its nature as sterling remains under significant pressure in the face of a looming recession and a US Fed that looks likely to continue aggressive rate rises.”