The rise to over $1.37 is attributed more to a general weakening of the US dollar than to inherent strength in sterling. Its stability against the euro, at around 85 pence, reinforces the view that the pound’s surge against the dollar is primarily a consequence of the dollar’s performance.

Domestically, the pound has found support in the Bank of England’s cautious approach to interest rate cuts compared to its counterparts, such as the European Central Bank.

Michael Pfister, an FX analyst at Commerzbank, said: “Core inflation in the UK has basically stopped moving for the past year – hard to say why. BoE officials are quite concerned. That makes it difficult to cut rates and also the economic outlook is not improving.”