The pound has climbed to its highest level against the dollar since the Brexit vote. Sterling rose to $1.438 in early morning trading, surpassing a previous peak seen in January. It later slipped back, below $1.43, despite official figures showing wage growth overtaking inflation for the first time in a year - as the data was slightly weaker than expected. Britain's currency has been supported in recent months by expectations of a Bank of England interest rate hike and growing hopes about a Brexit deal. Meanwhile, the US dollar has been coming under pressure over fears of a trade war. Britain's June 2016 vote to leave the EU saw its value collapse overnight from $1.50 and slip below $1.20 at the start of last year. Its weakness has driven up the cost of imports, pushing inflation higher and squeezing household finances as well as profit margins for struggling retailers. But manufacturers have been helped by the pound's weakness, which makes British-made goods more competitive globally. The recovery in sterling will start to reverse some of those effects as well as boosting the finances of British tourists as they prepare for summer holidays. The pound has also been at its highest level for nearly a year against the euro in recent days, at just under €1.16.
The pound has risen to its highest level against the dollar since the 2016 the Bank of England vote, reaching $1.438, while also hitting a 12-month high against the euro at €1.16. The boost follows increased hopes of a positive the Bank of England outcome and prospective interest rate increases from Brexit. While tourists holidaying abroad may appreciate the stronger pound, the manufacturing sector, whose products were made more competitive during sterling's slump, is set to feel the pinch.