LONDON: Sterling was mixed on Monday after hitting new highs against the euro and the dollar amid rate rise expectations and easing fears about the economic impact of the Omicron variant. Analysts said the currency has strengthened since mid-December as UK government resistance to further COVID-19 restrictions provided a much-needed boost to sentiment.

Britain has focused on rolling out booster vaccinations - which have reached more than 60% of the population - rather than requiring a return to lockdown measures.

Meanwhile, investors have ramped up expectations that the Bank of England will raise interest rates as early as next month after a surprise hike in December.

“We are looking for a decent November UK GDP release tomorrow of 0.4% month over month, which should keep expectations alive of a further Bank of England rate hike on February 3,” ING analysts said, recalling that overnight indexed swap (OIS) market prices an 80% chance of a 25 bps hike.

A preliminary estimate of UK gross domestic product for November is due on Tuesday. Sterling dropped 0.4% versus the dollar to $1.3542 by 1528 GMT, after briefly touching its highest level since November 2021 at $1.3602.