Pound surges as UK is seen in lead

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Sterling was up 3.09 cents against the greenback to $1.7599, having dived to a five-year low of $1.6903 on Friday as the stock market tumbled. Traders pointed to a feeling Britain is leading the way in solving the financial crisis gripping world markets as well, as to broad dollar weakness.

A climb in the euro against the dollar added strength to the rally. It came despite inflation soaring to a 16-year high of 5.2% and further evidence from the housing market and High Street that Britain is plunging deep into recession.