LONDON (Reuters) - Britain’s pound surged above $1.36 on Friday to its highest level since the results of last June’s vote to leave the European Union, putting it on track for its best week against the dollar since October 2009.
Sterling strengthened by more than 1.6 percent on the day to hit $1.3616, its highest since June 24, 2016. It also climbed 1.3 percent against the euro.
The pound had already recorded its best day since April on Thursday, after investors brought forward their bets on when the Bank of England would raise interest rates after it signalled it would do so in the “coming months”.
The UK currency built on those gains on Friday after BoE policymaker Gertjan Vlieghe said “the appropriate time for a rise in Bank Rate might be as early as in the coming months”.
Britain’s blue chip FTSE 100 index, whose internationally-focused stocks mean it tends to be inversely correlated to the value of sterling, extended losses as the pound surged. It hit a session low, down 1.3 percent and trading at its lowest level in four months.
Britain’s mid cap stocks also slid 1 percent to a two-month low.
British government bond yields soared for a second successive day, with two and 10-year bond yields up almost 10 basis points each. Ten-year gilt yields were set for their biggest one-week jump since June 2013, with a rise of 32 basis points.
Reporting by Jemima Kelly; Additional reporting by Kit Rees and Dhara Ranasinghe; Editing by Nigel Stephenson