Sterling edges higher following measures to calm markets


LONDON, Oct. 4 (Xinhua) -- The British pound continued its rally and traded above 1.14 against the U.S. dollar on Tuesday as the measures taken by the United Kingdom (UK) government and the Bank of England (BoE) appeared to have calmed the markets.

At its two-week high against the dollar, the pound has regained the loss in the wake of the widely criticized fiscal plans announced by the government, which were feared to ramp up public borrowing, bring serious fiscal uncertainty and push up inflation.

The government's decision on Monday not to scrap the highest 45-percent rate of income tax, and the BoE's emergency intervention in the bond market last week, were considered to have provided reassurance.

Chancellor of the Exchequer Kwasi Kwarteng reaffirmed on Tuesday that the much-expected fiscal forecast for the tax-cutting measures from the country's independent watchdog of public finances will be published on Nov. 23, dampening the prospects of an earlier release date to calm markets.

The pound has fallen more than 15 percent against the dollar this year, and analysts said the British currency was still under pressure.

"Even though recent developments in the UK may have provided some reassurance to investors and helped sterling to recover, we think that the deteriorating global economic outlook will ensure that the pound remains under pressure for a while yet," Adam Hoyes, a markets economist at Capital Economics consultancy, said.

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