Sterling's Stride Amid Political Clatter: Pound Reaches New Heights

The pound rose for the fourth consecutive day, driven by strong domestic data and retail inflation. Sterling reached near a four-month high despite political tensions in the UK, including a potential Labour Party leadership challenge. Analysts caution traders to focus on UK's volatile political situation.

The British pound continued its upward trajectory against the U.S. dollar for the fourth day in a row, buoyed by recent retail inflation data and persistent UK political uncertainty.

Sterling was recently 0.12% higher against the dollar at $1.3696, nearing a four-month high, even as it fell slightly against the euro. The dollar's pressure from geopolitical and trade uncertainties contributed to sterling's strength, supported by robust domestic economic indicators.

Retail prices surged in January, presenting a challenge for the Bank of England in managing interest rates. Meanwhile, political friction, such as Labour's internal disputes and potential leadership shifts, pose further risks to the pound's stability, analysts warn.

(With inputs from agencies.)