Sterling falls following poor economic data

Sterling fell on the currency exchange markets yesterday (February 18th) following news that the government has been forced to borrow more money.

As tax receipts dropped off sharply, net borrowing in the UK was over £9 billion higher in January 2010 than it was a year previously.

Despite reassurance from the Treasury that it would meet its borrowing targets, the budget deficit was higher than expected and is thought to have played a roll in the drop in confidence in sterling.

ING currency strategist Tom Levinson told Reuters: "The UK public finances numbers are dreadful, plus the mortgage lending figures were bad too and sterling could continue to come under pressure."

He added that despite the international focus on the eurozone, the UK won't escape a hit to its currency, especially with the general election just around the corner.

One pound sterling bought 1.557 dollars at 17:30GMT yesterday evening.

Posted by Thomas Smith

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