Pound rises but negative sentiment prevails

Prime Minister Gordon Brown said on Wednesday he believed Britain would maintain its coveted top credit rating and announced a pay freeze for top civil servants to help tame a record deficit.

But worries over the public finances prevailed, with the deficit heading for 12 percent of GDP this fiscal year.

"Markets are currently not very receptive to an overly casual approach to national finances. As a result the period of weakness in sterling is likely to continue," said Commerzbank analysts in a note.

Data releases in the UK are now sparse ahead of Bank minutes and employment data due Wednesday.

( Editing by Nigel Stephenson)