Sterling could pare gains made against the dollar and other major currencies unless the government fails to rein in spending and cede greater control to the Bank of England (BoE), UBS has warned.The organisation lambasted the UK government for interfering with BoE policy setting and warned that failing to grant full autonomy to the institute would undermine faith in the strength of the economy and the pound.Speaking to Bloomberg yesterday (July 14th), Mansoor Mohi-uddin, Zurich-based chief currency strategist at UBS, the world’s second-largest currency trader, foretold: "Currency markets are not pricing in risks that sterling faces over the next year. The currency is likely to remain a sell on rallies now after its sharp rally."Sterling has been the top performer among its ten counterparts in major industrialised nations over the last three months, after climbing back from a nadir of $1.3503 reached in January.At 08:45 GMT this morning, the pound was trading at $1.637.