Sterling rose over half a percent against the euro on Monday, after the single currency fell sharply on news European Central Bank policymakers were awaiting more data before deciding whether an interest rate cut is justified.
A Reuters story quoting eurozone central banking sources about the mood among ECB policymakers overshadowed earlier British data which pointed to a continued slowdown of the housing market.
"The ECB story is a pretty big thing for the euro and it was seen in euro/sterling," said Adarsh Sinha, currency strategist at Barclays Capital.
The Reuters item saying the Governing Council is split over whether a cut would help the flagging economy came after EU leaders failed at the weekend to agree on a long-term budget, plunging the bloc into deeper crisis.
Against the euro, the pound was up over 0.6 percent to 66.64 pence by 1410 GMT, as the single currency fell over one percent versus the dollar. Sterling had fallen 0.4 percent against the dollar to $1.8226.