Page last updated at 09:19 GMT, Tuesday, 2 December 2008

Pound struggles after sharp fall

Sterling pound
The pound has been battered by fears of a prolonged recession in the UK

Sterling has slipped again against the US dollar after a massive fall on Monday - the largest in percentage terms since 1992.

The pound was trading at $1.479, as against $1.483 at the previous close.

On Monday it fell 5.2% against the dollar as yet more bad economic data pointed towards a prolonged recession and further interest rate cuts.

Sterling was almost steady against the euro on Tuesday, at 1.176, compared to 1.174 euro on the previous day.

Pound Sterling v United States Dollar intraday chart
*All Times GMT

The pound's fall on Monday was the largest since the sterling crashed out of the Exchange Rate Mechanism (ERM) in 1992.

Sharp falls in the FTSE 100 index - down 5.2% on Monday - served to undermine the currency.

The poor economic data increases the likelihood that the Bank of England will cut interest rates on Thursday.

HSBC confirmed on Monday it is cutting 500 jobs across the UK, while carmaker Aston Martin announced it will cut 300 full-time and 300 temporary jobs.

Mortgage approvals also fell in October, according to figures released by the Bank of England, suggesting house prices may fall even further.

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