Economics
The pound was driven to a 14-year high against the dollar as the US currency came under a continuing assault on the markets. Sterling rose as high as $1.9686, before closing at $1.9670, up 1.76 cents on the day, at its highest level since Black Wednesday, when sterling was ejected from the European exchange-rate mechanism. Analysts raised the prospect of a return to a $2 pound. The Bank of England’s trade-weighted index closed at 104.0, a 2½-year high.
The Bank of England’s Governor, Mervyn King, rejected claims that high street lenders are behaving irresponsibly by offering mortgages worth five or six times annual salaries. In other comments to the Commons Treasury Committee, Mr King sounded a warning that booming global asset prices are vulnerable