Page last updated at 17:33 GMT, Wednesday, 21 January 2009

Pound at lowest level since 1985


Sterling's slide has continued, with the pound touching $1.3622, as concerns about the UK economy and the banking sector intensified.

Sterling fell to its weakest level against the dollar since September 1985, before rising to $1.4015.

The pound remains weak against the euro, with the single currency now worth more than 93.3 pence.

Shares in Barclays took a further hit on Wednesday, sliding more than 9% in London trade.

But HSBC and Lloyds Banking Group finished ahead, up 30.5p to 515.5p, and 0.3p to 45.1p, respectively. And RBS shares were ahead by 21%, or 2.2p, at 12.5p.

However concern remains about the health of the global banking system.


Last summer the pound was trading at more than $2.

The pound's slide this week followed RBS signalling it would make a record loss in 2008 and further government measures to encourage UK banks to lend.

"Fresh concerns about the key banking sector have fed through into broader concerns about the outlook for the economy," said Simon Derrick, a currency strategist at Bank of New York Mellon.

Economic data released on Wednesday exacerbated these fears.

UK mortgage lending fell by 30% in 2008 to the lowest level since 2002, while unemployment rose by 131,000 to 1.92 million between September and November.


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