Pound rises to pre-Black Wednesday high
Thursday, 30 Nov 2006 11:06
The pound traded at $1.956 this morning
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Sterling today reached levels against the dollar not seen since immediately prior to the crash when Britain withdrew from the European Exchange Rate Mechanism (ERM) in 1992.
Today's 14-year-high came about this morning with the pound trading for $1.956.
The pound's strength has been cemented by increases in interest rates by the Bank of England, while economic data from across the Atlantic suggests the US economy is struggling.
But today's news raises expectations that the Bank will up rates above their current five per cent level in the new year.
Building society Nationwide today revealed that house prices maintained their relentless annual growth with a 1.4 per cent increase in prices in November.
A weak dollar represents good news for both British Christmas shoppers willing to travel to the US.
On September 16th 1992, John Major's Conservatives were forced to withdraw from the ERM, with the pound tumbling 25 per cent as a result.
Upon coming to power in 1997, the Labour Treasury said that the so-called Black Wednesday had cost the UK economy £3.3 billion.