The pound is hovering close to its highest level in a year as markets net on interest rate cuts by the Federal Reserve next month.

Sterling was trading at $1.308 this morning after surging to a one-year high on Wednesday.

It comes amid growing signs that the US central bank will begin to bring interest rates down in a few weeks’ time.

Minutes from the Federal Reserve said the “vast majority” of policymakers felt that a September cut was likely to be appropriate if the data came in as expected.

Markets have now fully priced in a 25-basis-point cut in the USnext month, with a 1/3 chance of a 50-basis-point cut.

The euro also gained ground against the dollar, while oil prices dipped amid concerns about weakening demand in China.

Read the latest updates below.