July 22 Reuters Sterling rose slightly as investors awaited further clues about the Bank of England39;s monetary path from the SP Global Composite Purchasing Managers39; Index, which is due on Wednesday.

Long positions have increased for the third consecutive week to an all time high of 10.769 billion.

British inflation defied forecasts last week, leading investors to reduce their bets that the BoE will start cutting rates next month for the first time since 2020.

Sterling was up 0.05 at 1.2935 after hitting 1.3044 last week, its highest level since July 2023.

The euro was flat at 84.22 euros per pound, after reaching a 112week high at 84.32 on Friday.

Analysts flagged that sterling is more attractive than other risky currencies. It is less dependent on the Chinese economy than the Australian dollar, and Britain has a less uncertain political outlook than the euro area, with less concerns about fiscal discipline.

New finance minister Rachel Reeves is likely to announce her first budget after parliament39;s summer recess.

She and Prime Minister Keir Starmer have ruled out increases in the rates of income tax, corporation tax and valueadded tax, leaving her little room for manoeuvre to improve public services and boost investment.

The Bank of England39;s broad tradeweighted sterling index is now barely 3 away from the levels traded in June 2016, before the Brexit vote, flagged Chris Turner, head of forex strategy at ING.

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