Page last updated at 21:53 GMT, Wednesday, 20 May 2009 22:53 UK

Pound strengthens against dollar


The pound has strengthened against the dollar, after Bank of England minutes revealed that policymakers considered boosting money supplies.

The prospect of the move, which could encourage lending - stimulating the economy - boosted sterling.

On Wednesday, the pound rose as high as $1.5794 against the dollar, its strongest level in six months. Sterling was worth 1.1445 euros.

The dollar was also weaker against both the euro and the yen.

Meanwhile, the yen was hit by the announcement that the Japanese economy had shrunk by more than 4% in the first quarter of 2009.

With analysts seeing indications of economic recovery, there are signs that investors are moving away from the greenback, often deemed a safe haven.

In January, the pound hit a 23-year low of $1.35 against the dollar.

Last July, the pound was worth more than $2 but its value plunged as signs emerged over the degree of the downturn in the UK.

The May minutes also showed members had unanimously voted in favour of keeping interest rate unchanged at 0.5%.

The Bank of England's minutes showed the bank was open to increasing its quantitative easing plan by the maximum £75bn permitted, which would help encourage lending.

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