LONDON (Reuters) – The pound rose to a new 13-month high on the dollar on Thursday and also strengthened against the euro after British business activity data showed steady growth momentum going into the second half of 2024.

The pound rose 0.3% to as high as $1.3129, its highest since July 2023. Should it be able to squeeze past the $1.3143 hit then, that would take the British currency to its highest since April 2022.

The pound’s recent gains against the dollar – it is up 2% in August – have been in part a function of a weakening in the U.S. currency as markets become more confident that the Federal Reserve will start cutting interest rates in September, and cut several times by year end.

But the British leg of the pair also played a role on Thursday with the business activity data.

The preliminary “flash” estimate of the UK S&P Global Composite Purchasing Managers’ Index rose in August to 53.4 from 52.8, the highest reading since April and above the median forecast in a Reuters poll of a economists of 52.9.

Readings above 50 denote growth and data company S&P Global said the figures were consistent with the economy expanding at a quarterly rate of 0.3%.

“All in all, today’s August flash PMIs point to solid growth,” said Sanjay Raja, chief UK economist at Deutsche Bank, adding that data did not show any major cracks in the British labour market.

He did say, however, there were some signs of weakness in the service sector.

The British data was also stronger than the equivalent numbers from the euro zone, helping the pound to strengthen on the euro.

The common currency was last down 0.4% at 84.87 pence.

The composite PMI for the currency bloc, which includes both services and manufacturing bounced to 51.2, but analysts linked this partly to a boost from the Paris Olympics.