The British pound appreciated sharply vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0220 level and was supported around the $2.0145 level. The pair reached its highest level since 18 December 2007 after data were released that confirmed producers’ input prices reached a record level in February, up 1.7% m/m and 19.3% y/y, the largest annual increase since at least 1986. Output prices rose 0.3% m/m and 5.7% y/y, its highest level since July 1991. These data suggest pipeline inflation is accelerating and traders lifted sterling on the premise that Bank of England’s Monetary Policy Committee may not be able to lower interest rates as quickly as the markets anticipated. Consumer price inflation data will be released on 17 March. It was also reported that January manufacturing production rose 0.4% but industrial production fell 0.1%. Cable bids are cited around the US$ 2.0040 level. The euro gained marginal ground vis-à-vis the British pound as the single currency tested offers around the ₤0.7635 level and was supported around the ₤0.7595 level.