Pound climbs as sterling strengthens

THE pound edged higher against sterling, closing at 102.90p, despite sterling's strength against the deutschmark.

The publication of the Scott Report into arms sales to Iraq had been expected to hit sterling quite severely. However, as it became clear that there would be no mass resignations in the British Tory party, sterling gained half a pfennig against the deutschmark.

Dealers in London said this surprise move forced a lot of people to buy the British currency, pushing the price higher.

In addition, there was quite a lot of buyers around for the pound. Mr Jim Power, chief economist at Bank of Ireland Treasury, said a lot of interest was coming from overseas. When the pound fell below 103p last week, many international investors pulled out but they were now returning as the Irish currency headed back up from its recent lows of 102.60p, he said.

Meanwhile the Bundesbank left its rates unchanged yesterday and no further financial institutions followed the National Irish Bank's lead in reducing interest rates.