Analysts have predicted that sterling will continue to see a low rate of currency exchange.

Kornelius Purps, fixed income director at Unicredit, told the Daily Telegraph that sterling will continue to face difficulties as the UK struggles to recover from the recession.

He added that the currency was at risk of losing its AAA rating due to the mounting budget deficit.

A currency strategist from BNP Paribas echoed Unicredit's sentiments and noted that the bank is "very bearish on the UK".

BNP Paribas told the Telegraph that it expects sterling to fall to $1.31 against the dollar this year.

This would prove to be a substantial decline as the pound has not dropped below $1.40 in the past 12 months.

European countries have also experienced difficulties with their currencies as budget problems have grown.

However, Greece, one of the worst hit, had the benefit of the eurozone whereas sterling stands alone against the UK's mounting budget deficit.

Click here to make an International Money transfer

Posted by Sarah Pitton