Sterling held most its gains against the euro and the dollar yesterday even as analysts saw the dangers of UK prime minster’s Boris Johnson’s new Brexit deal becoming ensnared in the Commons.

Global shares rose on the belief more central banks will be forced to cut interest rates to shelter the global economy from the trade wars, but crash-out Brexit fears weighed heavily on sterling.

The pound climbed from a one-week low as a report showed the UK unemployment rate fell below 5% for the first time since 2005.

Sterling rose against the euro yesterday after the path was cleared for UK home secretary Theresa May to be appointed prime minister, as S&P Global Ratings sounded its concerns over the “the vulnerability” of the British housing market.

Sterling tumbled versus the euro and reversed an advance against the dollar after the Bank of England yesterday signalled there is scope to keep interest rates at a record low as inflation weakness persists.