Sterling soared to its highest level in two and a half years against the US dollar after the Bank of England held its interest rate steady, diverging from the Federal Reserve’s substantial rate cut. V

Tight monetary policy coupled with a penny-pinching fiscal agenda usually results in currency appreciation, and sterling is surging on the prospect. But it's far from clear why the UK government or the Bank of England want a rising pound right now.

The pound was at to its highest level in two-and-a-half years after the Bank of England left its key interest rate unchanged, taking a more cautious approach than the Federal Reserve. The pound climbed 0.