Pound breaks through $2 mark

The British pound has broken through the $2 mark, contrasting the slowing US economy with rising inflation in the UK.

Speculation over the breaking of the $2 mark has been rife among traders since late last year.

Currently trading at $1.99830 to one pound sterling, the recent rises has broken 15-year-old records. The last time the pound was equal to $2 was in 1992 when the UK, then under prime minister John Major, was forced to leave the European Exchange Rate Mechanism (ERM) on what became known as "Black Wednesday".

The current strength of the pound means many UK tourists are jetting off to popular destinations like New York and Los Angeles to indulge in cut-price shopping trips, but the boom has not been as beneficial for exporters or American visitors to the UK.

Problems in the US housing market also starkly compare to conditions in the UK where house prices continue to rise.

Under the prospect of at least one more interest rate hike by the Bank of England as early as next month, many investors have been buying UK assets.

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