Pound Slumps to Nine-month Low Over Fears of a Hung Parliament
MAIL ONLINE: The pound slumped to a nine-month low against the dollar today as fears over a hung Parliament sparked a sterling sell-off.

The currency fell sharply to as low as 1.478 against the dollar, as well as dropping below 1.10 against the euro.

Pressure on the pound comes as the Conservative lead against Labour in the polls narrows - threatening an indecisive General Election result at the same time markets want firm action to sort out the UK's dire public finances.

Mark O'Sullivan, director of dealing at foreign exchange firm Currencies Direct, said: 'Until the political situation in the UK becomes clearer, sterling will remain very, very vulnerable.'

The sudden drop from 1.52 to below 1.48 is the pound's biggest one-day fall since January last year, according to Chris Turner, head of FX Strategy at ING Commercial Banking.

He warned: 'While UK policymakers may have quietly welcomed the pound's recent weakness, they will not appreciate the kind of fast markets that can see a "sell UK" mentality developing.'

Sterling has lost nearly 10 cents against the dollar in little more than a week - hitting holidaymakers in the pocket, increasing pressure on petrol pump prices and adding to import costs for businesses. Read on and comment >>> | Monday, March 01, 2010

European Finance Ministers to Attack Alistair Darling over Sterling's Slide
European finance ministers are planning to round on Alistair Darling and tell him to bring the pound back under control, in what many fear could represent the opening salvo of a "currency war".

French and German ministers are expected to confront the Chancellor over sterling's weakness at the opening dinner for the Group of Seven finance summit in Rome tonight. They will ask him to consider direct action to increase the value of the pound, which has suffered its worst devaluation since at least the final breakdown of the Bretton Woods agreement in the early 1970s.

It came as the pound dropped further against a range of currencies, following the Bank of England's unexpected acknowledgement earlier this week that it plans to start buying gilts imminently as part of its quantitative easing efforts. Sterling fell more than a cent against the dollar to $1.4248, although it did strengthen marginally against the euro. >>> By Edmund Conway, Economics Editor | Friday, February 13, 2009

The Dawning of a New Dark Age (Paperback & Hardback) – Free delivery >>>