Figures since their last meeting have pointed to a buoyant economy. In the Chancellor's own words, "Britain is booming."But most City economists think it will fall to the next Chancellor - and they believe it will be Gordon Brown - to raise rates soon after the election. This prospect is helping to underpin the strong pound.In an active day's trading, gilts also soared on the tail of other government bond markets. And shares closed higher too, the FTSE 100 index ending up more than 35 points at 4,271.7."The dollar is dominant, but it was a nice psychological moment for sterling yesterday," said Alison Cottrell at Paine Webber. She, like other analysts, predicted the pound's new show of strength would continue.Gerard Lyons, chief economist at DKB in London, said: "The dollar is the key. The economic fundamentals are better in the US than either Germany or Japan.

The pound has risen on the dollar's coat-tails."Since the US Federal Reserve raised interest rates by a quarter point at the end of last month there has been fresh evidence of the robust economic outlook. Friday brought figures showing another big increase in employment and rising wage costs.The currency markets were also reassured by comments from US Treasury Secretary Robert Rubin, visiting Japan at the end of last week. He indicated that the US administration would not rely on a weak dollar to correct the country's trade deficit with Japan.The dollar passed the 125 mark for the first time since February 1993. Analysts see 130 as the next target.It also passed DM1.71, the highest level for three weeks, before ending just below that level after profit-taking in European trading.However, the weekend's single currency developments also favoured the pound against the mark. The German currency was weak across the board against other EU currencies.Along with Chancellor Helmut Kohl's decision to stand for re-election, the Noordwijk meeting persuaded investors that the political impetus towards EMU had been renewed.This suggests that there could be a greater degree of flexibility in deciding which countries will qualify - or in other words, more fudging of the Maastricht criteria. Eric Fishwick at Nikko Europe said: "The markets have scented a softening of tone on the part of Germany.".

Manchester United's chief executive, Martin Edwards, warned yesterday that footballers' wages would continue to spiral unless the transfer structure was altered in the wake of the Bosman ruling. Arguing for the abolition of transfer fees in the British game, Mr Edwards said wages of United's 46-strong playing staff had risen by pounds 2.5m on the previous year. Much of the increase was due to players seeking higher wages as a result of the Bosman ruling which allows players to move for no fee between European counties if they are at the end of their contract. "We would welcome the outlawing of transfer fees," Mr Edwards said.

"The current system encourages you to sign overseas players." Manchester United's total wage bill increased by around pounds 5.5m last year, of which 40 per cent was due to player wage increases. Mr Edwards was speaking as Manchester United announced profits of pounds 19.4m for the six months to 31 January compared to pounds 15.2m in the previous year.Gate receipts, television revenue and merchandise sales were all up strongly. The figures were also boosted by increased capacity at Old Trafford following redevelopment.The club revealed it had made profits of pounds 7.5m from its successful run in the European Cup. Mr Edwards said that winning the competition would cost the club money in the current financial year because of the huge bonuses that would be paid to players. However, the longer-term benefits of victory would be considerable. Group turnover was up from pounds 30m to pounds 50m.Meanwhile, Sheffield United, the Nationwide first division club, has sold two of its subsidiaries for almost pounds 1m. The business include the Le Coq Sportif brand, which is being sold to Gilbert & Pollard, a sporting supplies company..

Ford and Vauxhall saw their share of the British car market slide last month as the industry reported a "dramatic" and unexpected slowdown in the sales figures. The statistics, from the Society of Motor Manufacturers and Traders, showed registrations fell by 0.23 per cent in March compared with the same month last year, to 179,863. Between January and March sales have risen by just 18,500 to 549,534, with the bulk of the growth made in January. Roger King from the SMMT said the slowdown "seemed to be in conflict with surveys showing retail spending picking up". One possibility was that buyers had been put off by the election uncertainty and the likelihood of higher interest rates whichever party wins power.Privately manufacturers yesterday questioned the validity of the statistics, citing the early Easter break and a backlog of registration documents last week.The figures continued the worrying surge in sales of imported cars established last year.