Commenting on the rise in sterling to close to the $2 level David Kern, economic adviser to the British Chambers of Commerce, said:“The renewed surge in sterling, even if temporary, highlights yet again the risks to British business of aggressive interest rate increases.

“We appreciate that the MPC has to control inflation but a stronger pound performs a similar role in dampening economic activity.  We urge again the MPC to be cautious and take account of the long term impact of its actions on business.”