Sterling gains ease some pressure on exporters

Sterling strengthened against both the euro and the dollar after UK retail sales rose more than forecast in August, boosting investor expectations that the Bank of England will raise borrowing costs in the coming months.

The pound has rallied almost 5% against the dollar this month after the central bank’s monetary policy committee said that it could move to raise rates “in the coming months.”

Money markets are now pricing an almost 78% chance of a rate increase in November, with a hike fully priced in by next February.