Pound rises to its highest level since the Brexit referendum

The pound has risen to its highest overall level since the Brexit referendum, which took place more than a decade ago. Sterling has risen notably in recent weeks against both the euro and the dollar, ahead of an expected increase in interest rates. The most closely watched measure of the British currency's value, tracked against a basket of 18 of the world's main currencies, this week reached its joint highest level since the June 2016 referendum, according to Bank of England figures. The value stood at 86.4 on an index where 100 equals the pound's worth in 2005. The Bank is due to officially confirm the calculation on Thursday. The currency fell significantly after the referendum in June 2016 and reached further lows during the Brexit process, the Covid pandemic and the 2022 mini-Budget. Some traders said the UK was being viewed in a different light, citing relative political stability, solid growth and the rapprochement with the European Union. Sterling has responded strongly to Brexit developments and political uncertainty in recent years. Jim O'Neill, an economist and former Treasury minister, said he was not surprised by the currency's strength. "People were, and to a lesser extent, are, underestimating the improving momentum in the UK," he said. A stronger pound can help rein in inflation and increase consumers' buying power on imports and on holidays abroad. UK growth so far this year has outperformed all expectations, although there are signs that higher energy and fuel prices have now begun to hit consumer confidence. The Bank of England's nine-member Monetary Policy Committee faces an important decision on interest rates on Thursday, with the first rise in three years widely expected.