Pound heads into volatile trade against euro

Sterling headed for its biggest weekly decline in more than a month against the dollar late yesterday as UK prime minister David Cameron stepped up efforts to reach a deal with fellow European leaders over the terms of UK membership of the bloc.

Expectations for price swings in the pound against the euro over the next six months climbed to the highest since 2011 as sterling whipsawed yesterday.

With traders already pushing back bets on the timing of a Bank of England interest-rate increase, the prospect of a vote on leaving the world’s largest trading bloc is causing further concern.