A poor performance by the manufacturing sector has led to the pound dropping today (March 12th).
Manufacturing output fell by 1.5 per cent in January compared to the previous month, with the drop coming after a 0.9 per cent rise in output in December.
The pound hit a two-and-a-half-year low of $1.4832 against the dollar in the wake of the news, although there was a slight recovery to $1.4873 later in the day, reports BBC News.
Labour described the manufacturing statistics as "terrible", but the performance was defended by chancellor George Osborne.
He claimed the coalition's steps to boost the manufacturing industry in the UK have led to a rebalancing and rebuilding of the British economy, which contracted in the last quarter of 2012.
Alan Clarke, an economist at Scotiabank, stated a triple-dip recession now seems "inevitable".
Kathleen Brooks, research director at currency trader Forex.com, recently told the Daily Telegraph that one of the challenges facing the pound is the dollar's "new found strength".
Learn about the sterling and forex trading at City Index.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.