Pound climbs to highest since Brexit vote

Britain's Prime Minister Theresa May attends a press conference in 10 Downing Street London

Inflation drops to 2.5% but households still 'squeezed'

During early trade the pound was up about 0.3% against the dollar to trade at $1.4377 - just above its postreferendum high set in January. Sterling fell as low as $1.20 at the beginning of 2017, having traded at close to $1.50 prior to the vote.

There was a further boost from the official labour market statistics as the unemployment rate fell to a fresh 43-year low of 4.2% and the jobless total dropped by 16,000 - reversing rises in the number seen over the previous couple of months.

"The pound was the standout performer yesterday and is now the best performing G10 currency versus the U.S. dollar on a year-to-date basis".

The pound on Tuesday hit its highest level against the dollar since Britain voted to leave the European Union.

You can track the value of the pound with Markets Insider.

The pound rose to another post-Brexit-vote high this morning against the dollar as US President Donald Trump talked down the greenback and traders anticipated wage data to confirm a course for a rate hike next month.

Sterling was flat against the euro.

Tuesday's wage data adds fuel to the argument that the Bank of England will likely increase interest rates at the next meeting of its Monetary Policy Committee in the first week of May.

Anticipation of a rate hike mounted after the BoE warned in February that it could raise rates further and faster than markets were gave it credit for if the United Kingdom inflation picture evolved in line with its most recent forecasts.

There was also good news for wage growth, with wages growing at 2.8% over the period.

Rate setters predicted at the time that inflation would remain above the 2% target until at least the first quarter of 2021 and that it would average around 2.9% for the first quarter of 2018.

However, recent rises in the pound can also be put down to fundamental data as economists anticipate an interest rate hike from the Bank of England (BoE), which has given clear signals that domestic inflationary pressures in the United Kingdom are building.

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