Sterling had a volatile trading session on Thursday, rising against the euro and ticking up marginally against the dollar as markets digested news the ECB is getting ready for a series of rate hikes.

However, Britain's gloomy economic outlook and political worries continued to dominate traders' priority lists.

By early afternoon, the pound was up a marginal 0.03 per cent against the dollar at $1.25390, rising from earlier trading when it was down as much as 0.32 per cent.

Tracking a volatile euro, sterling swung wildly against the single currency in early afternoon. Just before 3pm, it was 0.48 per cent higher at 85.220 pence, but earlier in the afternoon had been trading as much as 0.47 per cent down.

"The main event for the FX market today was the ECB meeting that has pushed EUR lower across the board and weighed on EUR/GBP as a result," said Valentin Marinov, head of G10 FX research at Credit Agricole.

The European Central Bank ended a long-running stimulus scheme on Thursday and signalled it would deliver its first interest rate hike since 2011 next month, followed by a potentially larger move in September if inflation does not cool down.

Helping buoy the pound against the dollar was UK prime minister Boris Johnson’s announcement of a package of new measures to help a worsening cost-of-living crunch for households. It was his first policy speech since Monday’s vote of confidence when 41 per cent of his own parliamentary party voted against him. – Reuters