Speculators cut bearish bets that sterling will fall

Sterling rose for the first time in four days yesterday as hedge funds and other large speculators cut their bets that the currency will fall for a second week before the Bank of England’s latest policy decision.

It is the first back-to-back reduction in ‘net short positions’ in sterling since Britain voted to leave the EU in June.

The UK currency gained versus all except one of its 16 major peers before the release of a UK prices report today that economists forecast will show annual consumer-price inflation accelerated in August at the fastest pace since November 2014.