The pound briefly rose against a host of currencies on Friday, after the European Commission declared that enough progress had been made in Brexit talks to move on to a second phase of negotiations.

In early trading, sterling was up around 0.3 per cent against the dollar and 0.4 per cent against the euro. It also rose against Japan’s yen, the Swiss franc, the Australian and Canadian dollars and a selection of other world currencies.

Theresa May arrived in Brussels in the early hours of Friday, to stage a joint press conference with EU leaders.

European Commission President Jean-Claude Juncker said that “sufficient progress” had been made on all three so-called “divorce issues” – the Irish border, a financial settlement and EU citizens’ rights.

The UK business community immediately welcomed the progress.

“After the noise and political brinksmanship of recent days, news of a breakthrough in the negotiations will be warmly welcomed by companies across the UK,” said Adam Marshall, director general of the British Chambers of Commerce.

“Business will particularly cheer the mutual commitment to a transition period to support business confidence and trade, and will want the details confirmed swiftly in the new year when negotiators move on to the big questions around our future trade relationship with the EU,” he added.

Stephen Martin, director general of the Institute of Directors agreed.

“The most pressing concern for UK companies has been their EU staff, who have urgently needed certainty about their future in this country. We have grounds to hope now that our members will be able to send their employees off for the Christmas break feeling more comfortable about their status here,” he said.

Kallum Pickering, a senior economist at bank Berenberg, said that as a result of this, firms and households will likely expect that a soft Brexit has become more likely.