Pound Gains to $2, First Time in 15 Years, as Inflation Hits 3.1 Percent

(Bloomberg) -- The pound leapt to $2 for the first time in 15 years as a U.K. report showed inflation unexpectedly quickened to a decade high, prompting traders to bet the Bank of England will raise interest rates twice more this year.

The U.K. pound reached the strongest since September 1992, when billionaire investor George Soros and other speculators drove the currency out of the European system of linked exchange rates. Britain's economy, Europe's second-biggest, has shown few signs of cooling after three rate increases since early August. Another quarter-point move would take borrowing costs to 5.5 percent, the highest among the Group of Seven major economies.


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