Another high for pound a headache for manufacturing sector

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THE pound set another four-year high against the US dollar yesterday, posing a problem for attempts to rebalance growth with a focus on manufacturing and exports.

The ongoing struggle to revive the beleaguered manufacturing sector will not be helped by key export markets finding that goods stamped with the Made in Britain label are ever more expen- sive.

The pound climbed to 1.68 US dollars at one point, the highest level since late 2009, though later fell back a little.

It came as a Rightmove survey showed house sellers’ asking prices had seen their biggest year-on-year jump since 2007.

Bank of England policymakers have said they are keeping a watchful eye on the property market for signs of overheating that could create an unsustainable bubble.

The latest signs of buoyancy will have done nothing to dampen City speculation that the Bank’s policymakers will want to hike interest rates from their current historic low of 0.5 per cent sooner than previously thought.

Last week, it abandoned forward guidance linking rates to unemployment, with the jobless figure close to reaching the 7 per cent threshold which would allow the MPC to consider a rise.

Policymakers also upgraded their forecasts for the UK’s economic growth, further bolstering sterling. However, Governor Mark Carney has made clear his view that the recovery is unbalanced and too reliant on domestic demand.