Sterling rallied strongly on Monday, tracking equities higher, on news that the UK Treasury would inject £37bn of capital in three of Britain’s largest banks.

The pound advanced 1.5 per cent against the dollar to $1.7368, paring the 8.1 per cent fall it has suffered since September 22. Against the yen, the pound rose 1.2 per cent to Y174.97, while gaining 1.7 per cent against the euro to £0.7782.