Sterling is positioned to surge in the coming months to levels not seen since before the Brexit referendum, according to City forecasters, as the British economy sheds the burden of uncertainty.

Boris Johnson’s election victory is expected to draw foreign investment back to the UK, pushing the pound as high as $1.45, roughly its level on the eve of the 2016 vote.

Such a significant move, from the current level of $1.33, would slash the cost of imports, reduce living costs and hand families greater spending power to boost the rest of the economy.

Analysts at NatWest Markets issued the forecast over the weekend as the City absorbed the impact of Mr Johnson’s emphatic victory.

Senior strategist Mansoor Mohi-uddin said: “Sterling is set to rally into a higher $1.35-$1.45 range near term against the greenback as an orderly exit from the European Union in January and the increased chances of smoother trade negotiations during 2020 lift confidence in the UK economy.”