Sterling falls ahead of spending review

Sterling today fell against a basket of currencies amid concerns that factory order output was weakening and the economic outlook in the short to medium term is difficult to say the least. When you also take into account the spending review which the UK government will announce this week there is no shortage of negative comment in the markets in relation to the UK economy.

Over the last few months a number of companies have suggested that a weak currency could actually help prop up the UK economy in the short to medium term due to increased exports, but recent figures would appear to show this is not happening as yet. If exports do not recover as the currency moves further down it is difficult to see how and when the UK will move back to a more competitive playing field on the worldwide stage.

The impact of the credit crunch and worldwide recession on the UK currency has been enormous to say the least and many believe that fundamental weaknesses and structural problems within the UK economy have now been laid bare. Lessons will be learned, the UK economy will recover, austerity measures will kick in very soon but ultimately the next 24 months will be very tricky indeed for the UK economy, UK business and the UK population.