Sterling has reached its highest level against the euro since the start of the year after data suggested the UK recession may be over.
One pound was worth 1.1758 euros in early afternoon trading, having closed the previous day at 1.1672 euros.
On Wednesday the National Institute of Economic and Social Research estimated that the economy grew in April and May.
The pound was also boosted by data showing industrial output rose in April - the first monthly rise in 14 months.
In addition, the pound's rise was aided by a survey on attitudes to inflation by the Bank of England, which showed inflation expectations for the coming year rose to 2.4% in May from 2.1% in February, the first rise since August.
Sterling was also up against the dollar, rising one cent to $1.6429.
The pound had fallen against both the euro and the dollar last week and at the beginning of this week amid concerns about possible challenges to the leadership of Gordon Brown.
However, in the past couple of days the political situation appears to have stabilised.
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