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According to Reuters, sterling rose by 0.5 per cent to $1.6384 - its highest rate since January 2010 - after the UK CPI rose to a 28-month high of 4.4 per cent.
This came despite the Bank of England (BoE) predicting only a two per cent increase - and earlier this morning, the Reuters analysts thought the CPI figures would reach 4.2 per cent in February following its four per cent result in January.
In addition to this, Chris Turner, head of FX strategy at ING, forecast there will be further improvements for the pound in coming weeks.
He added: "Sterling has the most to gain if BoE [Bank of England] tightening expectations are re-priced because it was hit the most following events in Japan and the Middle East."
Posted by Greg Secker
