Sterling crisis deepens
03 September 2008
The pound has been falling for the past month reaching a new record low against the Euro yesterday and a two and half year low against the dollar.
In early trading sterling fell to $1,77 and rallied slightly to 81.42p against the Euro.
The latest fall comes after a warning from the OECD that Britain is in the first throes of recession and follows the Government's pledge to spend £600m bailing out the housing market by raising the stamp duty threshold.
The Government’s woes just keep getting worse with the Organisation for Economic Co-operation and Development saying Britain is the only major economy facing recession in the next six months.
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The fall in value of the pound is making it increasingly tough to import goods into the UK as costs spiral. It also puts more pressure on the Bank of England to control inflation.
It is widely forecasted that the Bank of England’s Monetary Policy Committee will leave interest rates unchanged this month. 
SaveBorrowSpend Philippa Adam
