Page last updated at 16:38 GMT, Wednesday, 5 August 2009 17:38 UK

Recovery hopes push pound higher

Toyota production line in Derbyshire

The pound has been rising again against the US dollar following better-than-expected economic news.

The Office for National Statistics said industrial production unexpectedly rose 0.5% in June from May, although it is still down 11.1% from last year.

Also, a survey from the Chartered Institute for Purchasing and Supply (CIPS) showed the service sector growing at its fastest for 18 months.

The pound rose back above $1.70 to its highest level since October 2008.

The rise in industrial production was the biggest since October 2007 and was helped by a surge in car production.

The CIPS purchasing managers' survey gave a reading for the services sector of 53.2 for July, up from 51.6 in June.

Any figure above 50 indicates an expansion in the sector.

It was the highest reading since February 2008.

"It is very much consistent with the green shoots recovery story," said Mark Miller, an economist at HBOS.

"It continues the theme that the forward-looking business surveys are showing some more encouraging signs."

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