The pound has climbed to its highest level in more than two months as expectations of a soft Brexit deal which could keep the UK within the single market took root.
Sterling’s latest rise came as Chancellor Philip Hammond, who is attending a meeting of the EU member states’ finance ministers in Brussels, acknowledged Britain may keep “paying in” to the EU as a way of retaining access to its economic privileges.
Mr Hammond said: “We want to keep all options open.”
The possibility of a so-called soft Brexit has pushed sterling up to $1.277 – its highest level since early October.
Reflecting on this morning’s trading session, Connor Campbell, of SpreadEx, said: “Sterling’s slight growth this morning has seen it hit a two-month high, largely due to the fact that Philip Hammond has claimed Britain wants to ‘keep all options open’ when negotiating the country’s EU divorce.”
Sterling has climbed almost 6 per cent against the dollar since the start of October, when it was trading around $1.20 on expectations for a hard Brexit – a view driven in large part by comments from Prime Minister Theresa May and other senior members of the ruling Conservative party at its annual conference.
Brexit secretary David Davis last week said paying for access to the single market was a possibility for the country’s future relationship with the EU.
Asked about Mr Davis’s comments, the Chancellor said: “That is something we would have to look at, looking at the costs and the benefits based on what is in the best interests of the British taxpayer”
Additional reporting by Reuters
