Sterling rose to its highest in more than two and a half years against a trade-weighted basket of currencies on Monday, buoyed by its jump to a 20-month peak against a broadly weaker euro.

Sterling's trade-weighted index rose to 83.2, its strongest since August 2009, BoE data showed.

The gains came as euro zone political and economic uncertainties drove the common currency to a 20-month low of 81.51 pence. The pound also continued to benefit from last week's upbeat retail sales data and less dovish Bank of England minutes.

(Reporting by Jessica Mortimer)