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Good retail sales also encouraged Forex traders to favour the pound, as a Confederation of British Industry survey showed monthly figures in July rose at their highest rate for three years, reports Reuters.
Rapid early gains brought the British currency to $1.5535, its best value since February this year.
Later in the session it fell back slightly to $1.5517, an increase of 0.2 per cent on the day.
Good European bank results included UBS, where strong investment banking and client profitability allowed the financial group to better rivals' performances and beat profit forecasts.
The publication noted investors remain "on a high" after the test results of continental finance providers on Friday revealed few weak points to perturb market speculators.
British firms Lloyds Banking Group, Barclays and the Royal Bank of Scotland all rose between 2.7 per cent and 4.8 per cent, supporting FTSE 100 gains.
Posted by Clive Arneil
