Sterling yesterday hit a new high against the dollar of $2.03, having managed for two weeks to stay above $2 - a level it had breached for the first time since 1981. The recent rise, though eye-catching, is small in the context of the pound's vigour over the past decade, an enduring strength that has had far-reaching consequences both for Britain's economy and for those of its tradingpartners.

The clearest manifestation, of course, is in the greater purchasing power of US-bound tourists and shoppers. Anyone able to stomach the security queues and immigration rigmarole can pick up an iPod in New York, holding 20,000 songs, for $349 (£171). The same model retails for £239 in the UK. A Diane von Furstenberg wrap dress selling for $325 in Bloomingdale's, the New York department store, costs almost £100 more in the UK.