Bye bye Sterling

Gordon Brown used to claim that the British economy was best placed to withstand the forces of recession. He has been less gung-ho about this recently, and with Sterling plumbing new depths almost every day it would be hard to justify such a complacent argument. With the Bank of England due to announce another interest rate cut today, I see Sterling is already another 2cents down against the dollar (that's another 1.5%). I presume that the markets have already factored in a 1% drop in interest rates but are worried about that becoming 1.5%. So if rates drop by 1.5% you can expect Sterling to drop even further, if they drop just 1% then a small recovery may be in order. If the unlikely happens and rates are reduced by less than 1% then Sterling might even rise back to 1.55 against the Dollar, but this will be temporary, Sterling is heading for 1.30 against the Dollar and maybe beyond.

Bye bye holidays to Florida and hello Frinton.