British Pound Soars as It Enters EC’s Currency Grid

The British pound and London’s stock market soared today as sterling formally entered the European currency float after years of resistance from British Prime Minister Margaret Thatcher.

The pound began trading within the European Exchange Rate Mechanism early in London after an agreement was clinched with the rest of the 12-nation European Community over the weekend.

Britain announced Friday it was dropping its longstanding opposition to joining the EC’s semi-fixed currency grid. The pound surged as a result, with buying fever spreading to the stock market today.

Trading volume for the day soared to 1.08 billion shares, an all-time high, helped by an estimated 300 million shares at the opening that included leftover orders from Friday.

A London Stock Exchange spokeswoman said the highest daily volume recorded was 997.3 million shares on July 9, 1987.

“I can’t remember the last time we turned over 500 million shares, let alone 900 million,” one dealer said.

The Financial Times-Stock Exchange index of 100 top shares, or “Footsie” as it is called, ended 57.7 points higher at 2,201.6.

The pound rose as high as 3.05 German marks in a spectacular rally that brought it up 10 pfennigs since Friday.

Dealers said economic history was made when trading screens flashed the “go” signal.

This took the form of an announcement this morning by the Bank of England of the rates at which the pound--once the world’s leading currency in Britain’s imperial heyday--is aligned to the German mark. It is set at 2.95 marks and may fluctuate in a band between 2.7780 and 3.1320.

After rising just above 3.05 marks, the pound eased to around 3.03. That was well within its limits, but some analysts thought it might go higher during the week.