LONDON: Sterling jumped to a one-month high against the euro on Tuesday, after the European Union’s chief Brexit negotiator said he was ready to speed up discussions with Britain, easing concerns about the lack of progress in negotiations.

Talks intended to unravel more than 40 years of union with EU member states have become bogged down over what Britain should pay to leave the bloc, with some market analysts predicting a prolonged period of pain for the economy.

On Tuesday Michel Barnier said that the agenda and dates for the next round of Brexit talks would be set “in (the) next few hours or days”.

“From the markets’ point of view this may suggest that we are getting closer to the trade negotiations part of the process, and that’s playing out as a sterling positive,” said Valentin Mironov, head of G10 FX research at Credit Agricole.

“Indeed, this is something that UK officials have been pushing for some time now and it may be the first indication that the EU may be willing to meet those demands.”

Sterling rose 0.3 percent on the day against the dollar to a high at $1.3258 before it settled to trade at $1.3244.

Against the euro, the pound hit a one-month high of 87.78 pence after Barnier’s comments, before also edging down slightly to 87.86 pence. Sterling was set for a second consecutive month of declines.

Before the news, the pound was trapped in a narrow 30 basis points range, among the quietest days in a 15-year trading history according to Thomson Reuters data, with investors sidelined before a Bank of England rate decision on Thursday.

Statements from British Prime Minister Theresa May’s spokesman on Tuesday describing a “significant acceleration” in preparations for a post-Brexit Britain - including the hiring of thousands of workers for new customs posts - could also alleviate some concerns.

But with a rate hike likely, investors will be sensitive to any indications about Brexit’s impact on the health of the economy, as bets are placed on whether a rise in borrowing costs could turn into a longer-term tightening cycle.

“Following the BoE’s... decision we think the market’s focus will remain on developments in the data, Brexit talks and what comes of (finance minister) Philip Hammond’s 22 Nov. Autumn Budget,” analysts at Nomura bank wrote in a note to clients.

They said they expected a hike on Thursday, with the BoE leaving the door open for possible further rate rises.

A monthly consumer sentiment survey released on Tuesday showed British consumers turning slightly gloomier in October as they remained downbeat about the economy.—Reuters