The pound has remained just below 90p sterling on the international markets, as the British currency failed to make further headway. The pound's position also remained stable in the ERM band at around 12.8 per cent stronger than the weakest currency in the system, the French franc.

The pound closed at 89.90p against sterling, from 89.54p a day earlier and at 2.6975 marks from DM2.6989.

Illustrating the international focus on the pound, a rumour swept the market that the EU monetary affairs committee would be discussing the Irish currency's position in the ERM when it meets this weekend.

However, this was later scotched when a senior EU official said the pound would not be discussed.

Mr Pat O'Sullivan, economist at AIB Group Treasury, said that as long as these conditions continue, there is no need for Central Bank intervention or for a revaluation of the pound in the ERM.

Sterling remains the key to the pound's future movements and analysts are divided over how much further it can go. Just a month ago many believed it could not reach DM3. Many now believe that new data or further interest rate rises will be needed to push it any higher.