Pound’s rally against euro unsustainable

THE British pound reached a 12-year high against the dollar last week. Sterling traded at 1.9438 against the greenback, and at this rate it can’t be long before one pound buys two dollars.

Sterling hasn't tested these heights in more than 12 years, not since Black Wednesday, and the exchange rate mechanism crisis of 1992.

Thankfully, the circumstances behind the pound's current rally are totally different to those which tipped Britain into recession following Black Wednesday, but the fact that it's 12 years since the pound traded at these levels shows just how exceptional the current exchange rate is.