The British currency gained 0.7% against the US dollar in Asia trading on Monday.
Meanwhile, analysts at the EY Item Club said "high energy prices, elevated inflation, rising interest rates and global economic weakness" meant the UK economy was "expected to be in recession until the middle of 2023".
The economic forecasting group has significantly downgraded its previous summer forecast which estimated the economy would grow by 1% in 2023. The EY Item Club said it expects inflation to peak at just below 11% in October, lower than previous predictions because of the government's intervention on energy bills. Currently, inflation is running at 9.9%.
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