Sterling on the rise again

The pound rose by 0.2 per cent against the dollar this morning to $1.6311, Reuters reported, following the release of report from Moody's credit ratings agency.

The relatively positive report on the UK's financial position appears to have calmed investor fears on sterling, contributing to the pound's rise.

The report calmed worries over Britain's financial climate, as it indicated that there was no immediate risk of the firm downgrading of Britain's sovereign debt from its present gold-plated AAA rating.

Geraldine Concagh, an economist at AIB Group Treasury, explained to Reuters news agency: "Sterling has been given a bit of a lift from Moody's saying there is no immediate threat to the UK rating, but it has stayed within ranges against the dollar and the euro."

Investors were concerned about the strength of the pound following chancellor Alistair Darling's pre-Budget report earlier this week.

This assurance from Moody's will go some way to stem worries that the chancellor's report did not lay out adequate plans to improve the ever-increasing deficit in the UK's finances.

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Posted by Marie Chaplin