Pound surges as summer time price lower hopes vanish

The pound is on track for its best month since November as hopes of a summer interest rate cut dwindle.

Sterling is up 1.8pc against the dollar so far this month to trade at more than $1.27, which would be its best performance this year.

The pound, which is up against most major currencies, has been lifted by expectations that interest rates could be cut as late as December.

Traders have drastically reduced bets that the Bank of England could begin cutting interest rates over the summer after inflation figures came in higher than expected in April.

Before the inflation data, which showed prices rose at a rate of 2.3pc in April, a first cut had been given a 50pc chance of happening in June and was priced in by August at the latest.

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