Sterling edged down today as concerns over the direction of Brexit negotiations weighed on the UK currency.

Investors appeared to ignore supportive comments from a senior Bank of England policymaker that interest rates need to rise soon. 

The pound drifted 0.25% lower to $1.2891 today. 

Against the euro, sterling weakened by 0.36% to 92.24 pence per euro in early trades. 

The Bank of England should not keep interest rates at their record low of 0.25% as an insurance policy against the risk of a "bumpy Brexit" and it needs to start raising borrowing costs now, BoE policymaker Michael Saunders said in a speech today. 

Investors also had their eye on the third round of Brexit negotiations which started on Monday, with the European Union's chief negotiator saying he was concerned at the slow progress of the talks. 

The UK government has laid out a series of position papers that have outlined compromises over some of the issues likely to block progress in talks this year.

But EU officials say Britain needs to settle its divorce bill with the bloc before a trade agreement can be discussed