The pound has climbed to $1.40 against the US dollar as it reached a fresh post-Brexit vote high.
It came as sterling continued to rally thanks to growing optimism about the UK economy and protracted weakness for the US currency.
There is also growing optimism that Britain can secure a favourable Brexit deal.
The pound collapsed from $1.50 in the wake of the European referendum result in June 2016 to reach its lowest level against the dollar since the mid-1980s.
It slid as low as $1.20 in ensuing months but steadily gained ground during the course of 2017.
The pound hit a post-referendum high of $1.37 earlier this month and has since continued its rally, edging above $1.40 in the early hours of Tuesday before slipping back a little later in the session.
It comes as the dollar has weakened, not helped by anxiety over the recent US government shutdown.
The pound’s weakness since the referendum has had a major impact on the British economy, pushing up import prices which have filtered through to consumer inflation – at a time when household incomes are struggling to keep pace.
That has weighed on spending, dragging on the retail sector and wider services industry which dominates UK economic output.
However, the pound’s weakness has provided a boost to Britain’s factories, making their products more attractively priced for overseas customers.
Sterling’s latest rise leaves it not far off its level against the dollar in the months leading up to the Brexit vote, when it at times dipped to around $1.40.
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If maintained it will mean more spending power for British holidaymakers this summer compared to mid-2016, when a pound would only buy around $1.30.
Sterling’s recent performance against the euro has been more choppy and it was little changed in the latest session at around €1.14, compared to a pre-referendum high of about €1.30.
Source: Sky News