Rule Britannia

News is getting better and better for the UK with Employment and new business picking up, pointing to continuing momentum in Britain’s recovery. A Purchasing Managers’ Index increased to 58.7 from 57.6 in March, Markit Economics said in London today with the index having been above the 50 level that divides expansion from contraction since the start of last 2013.

While Bank of England policy makers meeting this week will almost certainly keep key interest rate at a record low, the improving data raises the prospect of an increase in borrowing costs as soon as this year.

This has led to a rise in Sterling v’s Dollar with the Pound rising 0.7 percent to $1.6990, the highest since August 2009. This is the first meeting with the unemployment rate below 7 percent voided their first phase of monetary policy guidance. They’re now in a second phase, where they’ve pledged to maintain current stimulus settings until they see evidence that more slack in the labor market has been used up.