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Boost as pound rises against euro

Article Date: 6/12/2009

Holidaymakers heading for the continent have received a boost after the pound rose to its highest level against the euro for more than six months.
Sterling, which almost reached parity with the single currency at the end of 2008, climbed to 1.174 euros.
The rally, which has also seen the pound rise on the dollar, comes after the National Institute of Economic and Social Research (NIESR) estimated that the UK economy grew in April and May.
The NIESR forecast follows a raft of cheerier recent news on the economy.
Official figures showed the manufacturing sector returned to growth for the first time in more than a year in March.
This came after data last week for the key services sector, which makes up 75% of the economy, grew in May for the first time since April last year.
The property market also appears to be pulling out of its decline, with Government house price figures confirming a rise of more than 1% during April and demand from potential buyers continuing to increase.
However, experts have urged caution over hopes for a sustained economic recovery just yet.
Bank of England interest rate setter Kate Barker said in a newspaper interview there was concern over the economy beyond this immediate "pick-up".
The pound was under pressure last week amid speculation over a possible leadership challenge to Prime Minister Gordon Brown. However, sterling was also up against the dollar, to 1.648.

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