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Pound falls below parity with the Euro

For the first time ever the pound has fallen below parity with the euro on the high street as consumers look to exchange their pounds for euros. While the rate in the foreign currency markets is still holding above parity, the rate available to the consumer in the high Street is always below this level. The fall in the pound has alarmed many and the currency appears to be under yet more pressure in the short term.

The main reason for the fall is the fact that the UK economy is as bad as anything else in Europe and apparently one of the worst prepared economies in the world. Aside from the fact that many are predicting further falls in the economy there is no backup funding available without taking the UK into major debt as we have seen of late. Debt for the UK is set to reach £1 trillion over the next two years which is a doubling of the debt only 12 months ago.

As interest rates continued to fall this is also playing havoc with the sterling exchange rate as there is no reason for traders to buy sterling over currencies offering a higher interest rate.

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