Pound’s rally gathers strength on growth boost

5th February 2018

Finance
Pound’s rally gathers strength on growth boost

The pound has continued its strong run against the dollar after news of a better-than-expected performance from the UK economy in the last three months of 2017.

Growth in the last quarter of 2017 hit 0.5%, ahead of the 0.4% investors had been expecting. That pushed the pound as high as $1.428 against the dollar, although sterling later fell back to $1.417, still up 0.2% on the day.

The pound is now trading at its highest level against the dollar since the Brexit vote, with today’s GDP boost enough to help the currency recover some ground lost to the greenback yesterday evening.

The latest growth figures mean the UK economy grew by 1.8% over 2017. While that is higher than expected, it is the slowest pace of growth since 2012 and contrasts with faster growth globally.

The FTSE 100 meanwhile rose 47 points, or 0.6%, to 7,663, despite the pound’s jump.

A stronger pound tends to hamper the index as its companies rely on overseas markets for around three-quarters of their earnings.

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