Sterling hits 26-year high

London, July 11:

The pound Sterling hit a fresh 26-year high against the dollar yesterday after news that Britain’s goods trade deficit with the rest of the world unexpectedly fell to its lowest since October 2005. But a rise in global oil prices to an 11-month high above $76 a barrel meant the UK will soon be paying more for its imported oil.

The UK’s Office for National Statistics reported a trade gap of £6.29 billion for May, down from an upwardly revised £6.93 billion figure the month before and consi-derably smaller than City pundits had expected. Anal-ysts said figures suggest Bri-tain’s exporters may be copi-ng better with the strong po-und than had been thought.

The pound pushed higher against the dollar on the news and moved ashigh as $2.024 as the dollar continued to weaken against all major currencies. It set a record low against the euro of $1.37, particularly after the ratings agency Standard & Poors placed $12 billion of sub-prime bonds on review for a possible downgrade.

Analysts said investors continued to focus on the di-fferences in interest rates between US and other states.