TIMESONLINE: Sterling fell against the dollar for the eleventh day in a row yesterday, its longest consecutive decline since 1975, as concerns mounted over Britain’s faltering economy.
The pound hit a more than two-year low of $1.8514 – a level not seen since July 2006 – further extending a seismic shift in currency markets in recent days as interest rate expectations for big economies change.
This latest fall came only days after the Bank of England struck a doveish note in its quarterly Inflation Report, leading analysts to believe that the door may be open for rate cuts once spiralling inflation starts to fall.
Investors are fleeing to the dollar after reassessing the merits of the US economy against those of the UK and the eurozone.
They are betting increasingly that the US Federal Reserve’s next move will be to raise interest rates, while gloomy data from the UK and the eurozone this week suggested that rate cuts could be on the cards.
Analysts say that sterling’s fall is not over yet. Bilal Hafeez, a Deutsche Bank foreign exchange strategist, said: “We could level off at this rate for a while but I expect the pound will fall further.” Sterling’s Decline Against Dollar Hits Run Not Suffered Since 1975 >>> By Gráinne Gilmore, Economics Correspondent | August 16, 2008
The Dawning of a New Dark Age – Dust Jacket Hardcover, direct from the publishers (US) >>>
The Dawning of a New Dark Age – Paperback, direct from the publishers (US) >>>
