Sterling hit a two-year high against the euro on Friday as traders weighed retail figures from the UK after the European Central Bank’s (ECB) latest interest rate cut.
A gain of 0.3% early on saw the pound hit its highest against the euro since April 2022 as the latter fell below the 83p mark.
This came after the ECB cut base interest for the second meeting in a row to 3.25% on Thursday, before Friday’s retail sales figures pointed to strength within the UK economy.
Though sales growth slowed to 0.3% in September, against August’s 1.0% growth, analysts had expected a decline.
"The reported consumer confidence crisis ahead of the Budget appears not to have reached the ears of customers just yet," interactive investor analyst Richard Hunter commented.
"Falling inflation and sufficient wage growth may have been enough to have underpinned the important consumer contribution to the economy."