Sterling jumped 1% against the dollar today to trade above $1.22 for the first time since August 30.

The gains came after British politicians seized control of the parliamentary timetable to try to block a no-deal Brexit.

Lawmakers who defeated Prime Minister Boris Johnson's government last night are expected to introduce a bill today seeking to stop Britain from leaving the European Union on October 31 without transitional arrangements. 

Boris Johnson, meanwhile, is expected to table a motion for an early election. 

The latest sterling moves take it further off three-year lows of $1.1959 hit before the parliament vote.

Analysts said the market is assuming the vote tonight passes," noting that the UK government's defeat in parliament had reduced the probability of a no-deal Brexit. 

While that is sterling-positive, the prospect of further prolonging Brexit uncertainty "will reduce sterling's potential upside," they added. 

The pound vaulted briefly past $1.22, rising 1% to a one-week high of $1.2220 as it was boosted also by a 0.4% dollar pullback sparked by yesterday's dismal US manufacturing data. 

Against the euro, the pound rallied 0.5% to 90.3 pence. 

Appetite for sterling was not dented even by weaker-than-expected services purchasing managers' (PMI) survey, though the figures came as a reminder that Britain's economy is in serious danger of entering its first recession since the financial crisis. 

The PMI fell to 50.6 in August from 51.4 in July. A Reuters poll had forecast a smaller decrease to 51. 

More big price swings are likely in coming days as the battle over Brexit enters another crucial phase. Possible outcomes range from a turbulent no-deal exit to abandoning the whole endeavour.

The British currency is now the second worst performing major currency year-to-date, according to Refinitiv data. 

Except for lows plumbed during an October 2016 "flash crash", sterling's fall yesterday took it towards levels not seen since 1985.

That $1.05 record low could be breached if Britain hurtles into a no-deal Brexit, some reckon. 

But its current respite may also be short-lived, especially if a snap elections is called. 

That would open up a new set of scenarios including the possibility of Labour leader Jeremy Corbyn becoming prime minister. 

"Not only uncertainty about the election outcome (thus various possible Brexit options) remains high, but the most probable alternatives don't appear to offer much of a respite for sterling," ING analysts told clients.

"We see Brexit/early election as under-priced by the market and look for more downside to sterling," they added.