Pound Rallies to Highest This Year as Focus Shifts to BOE Policy

The pound climbed to its highest level this year against the dollar on speculation the Bank of England will signal this week that it’s moving closer to raising interest rates.

Sterling strengthened at least 0.6 percent against all of its 31 major counterparts, extending its rally from the end of last week, when the U.K. general election unexpectedly produced an outright majority for the Conservative Party. While the Tory victory ended investors’ concern that drawn-out talks would be needed to form a government, it signaled deeper cuts to government spending that may dim the short-term growth outlook.