LONDON, June 19 Reuters The pound hit a 10month high versus the euro on Monday as investors waited for British inflation data and a Bank of England decision later in the week.

Against sterling, the euro fell to 85.20 pence, the lowest since August 2022. It was last down less than 0.1 at 85.25 pence.

The pound was down 0.13 against the dollar at 1.281, not far below the 14month high of 1.285 touched on Friday.

Sterling has rallied against both major currency pairs over recent weeks as economic data has suggested inflation is far more stubborn in Britain than in the United States or Europe.

The data has caused traders to factor in more rate hikes from the Bank of England, pushing up yields on British government bonds, boosting the pound.

The UK twoyear government bond yield rose to 5.012 on Monday, breaching the 5 level for the first time since 2008. Yields rise as prices fall.

Goldman Sachs said that, according to its tradeweighted measure of sterling, the pound is at its highest since mid2016, just after the Brexit referendum.

Potentially there is more room to go, said Pushkar Jha, head of UK inflation trading at Goldman, in a note to clients.

If the market continues to believe that the central bank will deliver on its mandate of achieving 2 CPI consumer price index inflation by its forecast horizon, then there is no reason why GBP can39;t continue being supported.

Bank of America and Barclays have both backed sterling to keep rising against the dollar, at…