The pound sterling jumped to its highest level in 14 months and broke the $1.28 mark, which was due to positive economic data and reduced fears of sliding into a recession, as well as the continued increase in interest rates on it.
The pound sterling topped $1.281 in early deals on Friday morning, according to what Al Arabiya Net tracked, the highest level recorded by the British currency in more than a year.
UK gross domestic product rose 0.2% in April, supported by the services sector, as consumer-facing companies saw more business as demand for their products rebounded.
The British economy rebounded as higher car sales and consumer spending helped it recover from a wave of public sector strikes the previous month.
The Office for National Statistics said gross domestic product rose 0.2% month-on-month, in line with economists’ expectations of a recovery from March’s level, when manufacturing fell 0.3%.
But the Office for National Statistics warned of signs of tension amid a sharp monthly decline in construction activity. The bureau said that under the pressure of rising interest rates and falling property values, homeowners and real estate agents had a bad month.
The data comes amid growing expectations that the Bank of England will raise interest rates for the 13th consecutive week from the current 4.5% next week in response to soaring inflation, adding pressure to households and firms already suffering from rising costs. borrowings. the highest level in recent decades.
Economists say a return to growth in April could be interpreted by bank policymakers as a signal that higher interest rates have not yet dampened demand enough to ease inflationary pressures.
And British newspaper The Guardian quoted Cathy Asher, chief economist at the Institute of Directors, as saying: “Families responded to the improvement in the weather in April by raising their discretionary spending levels, despite high spending.”
Official government data also showed that activity in the UK labor market was stronger than expected in April last year as wage growth reached its highest level since the end of the coronavirus pandemic and inflation fell less-than-expected in April to 8 .7%, the highest level. level in the world Group of Seven, which strengthened expectations of an interest rate hike.
