Sterling hit a seven-week high against the euro on Wednesday, building on gains during the previous session when the Bank of England's governor said there were "lots of issues" with cutting interest rates below zero.

Bank of England Governor Andrew Bailey said negative rates could hurt banks and potentially reduce their lending to companies when the economy is already struggling with a third national lockdown. Sterling rose 0.4 pc to 88.97 pence on Wednesday, its highest level against the single currency since Nov. 25.

Against the dollar, the pound rose 0.2 pc to USD1.3697, touching a nine-day high. The jump in the pound "definitely looks like a spill-over from yesterday's session with money markets continuing to pare back expectations of negative interest rates due to Governor Bailey's comments," said Simon Harvey, FX analyst at Monex Europe.

Market pricing shows investors expect negative rates from Britain's central bank in June. Before Bailey's comments, those expectations were for May. Following the completion of a Brexit trade deal in December, investors have turned their attention to Britain's economy and its COVID-19 vaccination campaign.

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