Sterling firmed versus the dollar and Euro, buoyed by optimism that Britain and the European Union can make significant progress towards a Brexit deal at an EU leaders summit.
Investors have pushed up the pound to its highest since July this week as they grow confident that a Brexit trade deal – helping Britain to avoid a disorderly and messy exit from the EU – can be clinched in the coming months.
The Irish border issue remains the chief stumbling block to a deal, while the EU prepares for a November summit where it hopes an agreement will be sealed.
British shoppers kept up their strong summer spending spree in August and showed no sign that the approach of Brexit is making them cautious, official data showed this morning.
In another sign that the country's overall economy is on track for solid growth in the third quarter of 2018, retail sales jumped by 3.3 percent compared with August last year, stronger than all forecasts in a recent poll of economists.