Sterling surged to its highest level against the dollar and the euro since May while British stocks and government bond yields also rose after reports that British and EU negotiators were closing in on a draft Brexit deal.

Already higher on the day, the pound jumped above its 200-day moving average, a closely watched technical level, after the report as investors watched for any signs of a breakthrough in the Brexit talks.

The British currency climbed 1.5% on the day to $1.28, a five-month high and also the first time it has gone above the 200-day moving average of $1.2713 since May.

It also rose by the same margin against the euro and was last trading 1.4% higher at 86.29 pence.

Sterling has risen nearly 5% higher over the past week as investors rushed to reprice the prospect of a last-minute Brexit deal by the end of October 31 deadline.