The pound advanced against the dollar as data showed a surge in business investment helped the British economy grow for a fourth straight quarter, boosting the allure of the U.K. currency.
Sterling rose versus the euro this week as Bank of England policy makers expressed little concern that the strength of the currency would harm the economy. Officials also said any increases in interest rates from a record low will be gradual and limited. Central bank Chief Economist Spencer Dale told Bloomberg there will probably be a “healthy” split among voting members on when to raise rates. U.K. government bonds advanced for a second week.
“We are seeing a gradual spillover of the recovery from consumption into the investment sector,” said Vasileios Gkionakis, head of global foreign-exchange strategy at UniCredit SpA in London. “This means that the recovery is becoming more sustainable. The pound will benefit from it because you will be talking about a strong and well-balanced economy and the Bank of England is going to hike rates earlier than consensus expects.”
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