The global credit crunch and debt crisis have shattered previous notions of what is and is not considered a safe haven — and sterling is one of the biggest beneficiaries of this revolution.

In some ways it seems an unlikely candidate for safe-haven status.

Last week the U.K. officially entered a double-dip recession — where output starts to fall again before it has recovered from the last downturn.

Moreover, the government is running a deficit, which is even higher than the worryingly elevated advanced-country average — it was equal to 8.7 percent of gross domestic product last year.

Nevertheless, the pound has risen by about 7 percent on a trade-weighted basis since last July. At $1.62 against the greenback on Tuesday, it was up 10 cents, or 7 percent, from a mid-January low. It barely paused for breath on news of the recession — resuming its ascent within hours.

What accounts for sterling’s as yet unstoppable progress?

It is fair to say that the paltry growth of the U.K. economy over the past year — which may have fizzled out altogether — has disappointed many economists. However, the euro zone’s performance has been equally dismal, with most analysts expecting official figures to show the currency union has entered recession in lockstep with the U.K.

Moreover, investors are concerned less by the size of fiscal deficits — which can, if they persist, provoke currency crises — than by whether they are going up or down. The U.K.’s is gradually falling, and has even met the target for the 2011-'12 financial year set out by Chancellor George Osborne. The Conservative-Liberal Democrat coalition government to which Osborne belongs has no opportunity for back-sliding, having set out unwavering austerity as its overriding central policy and berated the Labour opposition for not being sufficiently parsimonious when in power. The credibility of the U.K. government’s austerity program contrasts with the lack of trust in euro zone governments such as Spain’s to press ahead with cuts sufficiently severe to close the fiscal gap.

Moreover, sterling enjoys one clear advantage over the euro — no one doubts that it will exist in five years’ time. This has helped push the pound 13 cents higher against the euro since July, to €1.23 — a key driver of sterling’s trade-weighted rise, since the euro zone accounts for half of the U.K.’s overseas commerce. Investors seeking currency safety in Europe outside the euro zone have flocked to the pound partly because of the lack of other options. Intervention by the national central bank sent the Swiss franc plummeting last year. The Norwegian crown is strong, but not sufficiently liquid for most institutional investors.